Vaal River CMA Business Case

Transcription

Business Case
for the
Vaal River
Catchment Management
Agency
Business Case for the Establishment of the Vaal River Catchment Management Agency
Table of Contents
Issue and revision record.................................................................... Error! Bookmark not defined.
Table of Contents .......................................................................................................................... i
Abbreviations and Acronyms....................................................................................................... vi
1.
Introduction ......................................................................................................................... 0
2.
Description of Water Management Area ............................................................................... 3
3.
4.
5.
6.
7.
8.
2.1
Location................................................................................................................................... 3
2.2
Topography ............................................................................................................................. 5
2.3
Climate .................................................................................................................................... 5
2.4
Socio-economic Dynamics ...................................................................................................... 6
2.5
Water Availability and Requirements ..................................................................................... 7
Challenges .......................................................................................................................... 14
3.1
Technical Challenges ............................................................................................................. 14
3.2
Operational Challenges ......................................................................................................... 19
Strategic Motivation ........................................................................................................... 22
4.1
Policy context ........................................................................................................................ 22
4.2
Technical Benefits ................................................................................................................. 23
4.3
Operational Benefits ............................................................................................................. 24
Implementation Strategy .................................................................................................... 25
5.2
Evolution of the CMA ............................................................................................................ 26
5.3
Transfer of functions ............................................................................................................. 28
5.4
Status of CMAs in the Vaal Water Management Area.......................................................... 29
Legal Process ...................................................................................................................... 30
6.2
Legal requirements ............................................................................................................... 31
6.3
Establishment of the Vaal River CMA ................................................................................... 32
6.4
Corporate Form..................................................................................................................... 32
Functions of the CMA ......................................................................................................... 34
7.1
Introduction .......................................................................................................................... 34
7.2
Delegation vs. Assignment .................................................................................................... 34
7.3
Delegation of functions ......................................................................................................... 35
Organisational Arrangements ............................................................................................. 39
8.1
Overall Rationale ................................................................................................................... 39
8.2
Leadership ............................................................................................................................. 40
i
9.
8.3
Technical Expertise ............................................................................................................... 40
8.4
District Engagement .............................................................................................................. 46
Organisational requirements .............................................................................................. 47
9.1
Staffing Model ....................................................................................................................... 47
9.2
Summary of Staffing Requirements ...................................................................................... 49
9.3
District Offices ....................................................................................................................... 51
9.4
Human resource considerations ........................................................................................... 52
10. Financial Arrangements ...................................................................................................... 55
10.1
Source of Finance .................................................................................................................. 55
10.2
Flow of capital ....................................................................................................................... 60
10.3
Financial Systems Arrangements .......................................................................................... 62
10.4
Financial Viability .................................................................................................................. 64
11. Institutional and governance arrangements ........................................................................ 71
11.1
Corporate Governance Principles ......................................................................................... 71
11.2
CMA Governing Board .......................................................................................................... 71
11.3
CMA Board ............................................................................................................................ 72
11.4
Governance Committee Structures ...................................................................................... 72
11.5
Appointment of CEO ............................................................................................................. 73
11.6
Mechanisms for Regulation and Oversight ........................................................................... 73
11.7
CMA Business Planning ......................................................................................................... 74
11.8
Financial Control ................................................................................................................... 74
11.9
Change management ............................................................................................................ 74
11.10 Rebranding and stakeholder engagement strategy ............................................................. 75
12. Risk .................................................................................................................................... 76
12.1
Complexity of the project ..................................................................................................... 76
12.2
Spheres of Government ........................................................................................................ 76
12.3
Stakeholder acceptability...................................................................................................... 76
12.4
Delegation of powers and functions ..................................................................................... 76
12.5
Financial management .......................................................................................................... 77
12.6
Climate change and natural disasters ................................................................................... 77
12.7
Human Resources ................................................................................................................. 78
12.8
Organisational Technologies ................................................................................................. 78
12.9
Loss of staff through relocation ............................................................................................ 78
12.10 Inefficiency in the handover period ...................................................................................... 79
ii
12.11 Risk management.................................................................................................................. 79
13. REFERENCES ....................................................................................................................... 84
APPENDIX 1 – BENCHMARKING EXERCISE ................................................................................... 86
Introduction ...................................................................................................................................... 86
Approach ........................................................................................................................................... 86
Analysis ............................................................................................................................................. 87
APPENDIX 2 – ALTERNATIVE STAFFING MODEL ........................................................................... 89
Introduction ...................................................................................................................................... 89
Summary of Staffing Requirements .................................................................................................. 91
Office of the CEO............................................................................................................................... 91
Water Resources Management ........................................................................................................ 91
Water Resources Planning ................................................................................................................ 92
Integrated Information Management .............................................................................................. 92
Institutional and Stakeholder Coordination ..................................................................................... 93
Corporate Support and Finance ........................................................................................................ 93
District Offices ................................................................................................................................... 94
Human resource considerations ....................................................................................................... 94
Grading and remuneration ............................................................................................................... 94
Transfer of staff................................................................................................................................. 95
iii
List of Tables
Table 1 : Population in the Vaal River WMA ........................................................................................... 6
Table 2 - Scenario 1: High (No water loss reduction measures implemented) ...................................... 9
Table 3 - Scenario 2: High – With Eradication of Unlawful Water Use ................................................... 9
Table 4 - Scenario 3: High – With Eradication of Unlawful Water Use and Water Conservation and
Water Demand Management (WC/WDM) ........................................................................................... 10
Table 5 - Scenario 4: High – With Eradication of Unlawful Water Use, WC/WDM and Re-Use
(Surplus in Crocodile West River System) ............................................................................................. 10
Table 6 : Functions to be Retained, Assigned or Delegated by the DWS ............................................. 37
Table 7: Possible collaboration models with partner agencies. ........................................................... 43
Table 8 : Anticipated Staff Complement and Staff Costing................................................................... 47
Table 9 : Raw Water Charges ................................................................................................................ 58
Table 10 : Proposed Tariffs ................................................................................................................... 59
Table 11 : CMA Establishment Cost Estimate ....................................................................................... 65
Table 12 : Previous Years Expenses Budget .......................................................................................... 66
Table 13 : 2014/2015 Proto CMA Expenses Budget ............................................................................. 66
Table 14 : Proposed CMA Expenses Budget ......................................................................................... 66
Table 15 : Re-based Water Requirements Demand Projections .......................................................... 68
Table 16 : Projected Revenue Budget ................................................................................................... 68
Table 17 : Projected Revenue based on projected collections efficiency ............................................ 69
Table 18 : Projected Budget Surplus/Deficit ......................................................................................... 69
Table 19 : Data Sources Benchmarked Organisations .......................................................................... 86
Table 20 : Anticipated Staff Complement and Staff Costing ................................................................ 89
Table 21 : Analysis of Current and Proposed Roles .............................................................................. 96
iv
List of Figures
Figure 1.1 : Original 19 Water Management Areas of South Africa ....................................................... 0
Figure 1.2 : Proposed New Water Management Areas .......................................................................... 1
Figure 1.3 : History of the CMA development process ........................................................................... 1
The Vaal catchment area is split into 3 management areas, the Upper Vaal, Middle Vaal and Lower
Vaal management areas (Figure 2.1). ..................................................................................................... 3
Figure 2.2 : Net Demand Projections for the Vaal River System .......................................................... 11
Figure 2.3 : Projected Water Requirements vs Availability: WC/WDM implemented and Unlawful use
eradicated ............................................................................................................................................. 12
Figure 2.4 : Projected Water Requirements vs Availability: WC/WDM implemented, Unlawful use
eradicated, Desalinated Mine water added. ........................................................................................ 12
eradicated, Desalinated Mine water added and Re-use from Crocodile West. ................................... 13
Figure 8.1 : High level proposed Vaal River CMA functional structure................................................. 39
v
Abbreviations and Acronyms
CEO
CFO
CIO
CMA
CMS
DMP
DWS
IWRM
LRA
ISP
MAP
NWA
NWRS
NWRS2
PFMA
RQO
SONA
TCTA
WARMS
WfW
WMA
WMI
WRM
WUA
WRC
GIS
GDP
WAR
WC
WDM
IMC
AMD
STI
RO
HDS
CUC
OSD
HR
Chief Executive Officer
Chief Finance Officer
Chief Information Office
Catchment Management Agency
Catchment Management Strategy
Disaster Management Plan
Department of Water and Sanitation
Integrated Water Resources Management
Labour Relations Act
Internal Strategic Perspective
Mean Annual Precipitation
National Water Act
National Water Resources Strategy
National Water Resources Strategy 2
Public finance Management Act
Resource Quality Objectives
State of the Nation Address
Trans-Caledon Tunnel Authority
Water Registration Management System
Working for Water
Water Management Area
Water Management Institution
Water Resource Management
Water User Associations
Water Resource Commission
Geographic Information Systems
Gross Domestic Product
Water Allocation Reform
Water Conservation
Water Demand Management
Inter-Ministerial Committee
Acid Mine Drainage
Short Term Intervention
Reverse Osmosis
High Density Sludge
Capital Unit Charge
Occupation Specific Dispensation
Human Resources
vi
1. Introduction
The National Water Act (Act 36 of 1998) mandates the Minister of Water and Sanitation to
establish catchment management agencies (CMAs) for the management of water resources
at the catchment level. In order to facilitate the management of water resources, the
country was been divided into 19 catchment-based water management areas (WMAs)
(Figure 1.1).
ZIMBABWE
MOÇAMBIQUE
2
1
LU VUVHU /
LETAB A
LIMPOPO
BOTSWANA
4
3
OLIFAN TS
5
CROCODILE WEST
AND MA RICO
NAMIBIA
INK OMATI
10
SWAZILAND
8
LOWER VAA L
UPPER VAAL
9
6
MID DLE VAA L
7
USU TU TO
MHLATH UZE
THU KELA
14
LESOTHO
13
LOWER ORA NGE
11
MVOTI TO
UMZIMK ULU
UPPER ORAN GE
12
17
MZIMVUBU TO BU FFALO
OLIFAN TS/
D OORN
15
16
19
FISH TO GAMTOOS
B ERG
18
GOURITZ
BREED E
Figure 1.1 : Original 19 Water Management Areas of South Africa
The original intent was to establish CMAs in each of the 19 WMAs. On 19 March 2012, the
Minister pronounced the establishment of nine (9) CMAs, down from the originally proposal
19 CMAs, due to various reasons including the technical capacity required to staff CMAs,
and the challenges such a large number of institutions pose to the Department of Water and
Sanitation (DWS) in regulating their performance. In this reduction, new boundaries for the
nine water management areas are being demarcated through the National Water Resources
Strategy (NWRS) as is required under the National Water Act.
In terms of section 78(1) (b) of the National Water Act, the Minister may amend the name of
water management area of an established CMA and in terms of section 88(1) (a) the
Minister may for the purposes of re-organising water management institutions in that area
in the interests of effective water resource management disestablish a CMA if it is desirable.
Figure 1.2 below indicates the proposed revised 9 water management areas for the country.
0
Figure 1.2 : Proposed New Water Management Areas
As part of this process, the Vaal River CMA will be established for the whole of the
catchment area and not as was previously envisaged as a Lower, Middle and Upper Vaal
River CMA. The intention is that one CMA, called Vaal River CMA, for the purposes of this
report, will manage the water resources in this water management area.
Figure 1.3 : History of the CMA development process
1
This document sets out the business case for this change, in line with the requirements of
National Treasury in this regard, in order to facilitate approval by National Treasury of the
listing of this CMA as a Schedule 3A public entity in terms of the Schedules of the Public
Finance Management Act (Act 1 of 1999) (PFMA). It also sets out the required processes to
be followed by the Minister to achieve the required institutional changes.
The report is structured as follows:
•
•
•
•
•
•
•
•
•
•
•
•
•
Chapter 2 provides a description of the water management area and the key water
resource management challenges in the WMA;
Chapter 3 outlines with the strategic motivation for the establishment of the CMA;
Chapter 4 identifies the broad implementation strategy;
Chapter 5 sets out the legal process to be followed for the formation of the CMA;
Chapter 6 deals with the functions to be performed by the CMA;
Chapter 7 addresses the organisational arrangements to perform the CMA functions;
Chapter 8 deals with organisational requirements;
Chapter 9 analyses the financial arrangements and the financial viability of the CMA;
Chapter 10 deals with institutional and governance arrangements;
Chapter 11 deals with risks in the implementation of the CMA;
Chapter 12 deals with implementation considerations and actions;
Chapter 13 references; and
Appendix A summarises a benchmarking exercise against other CMA business plans.
2
2. Description of Water Management Area
2.1 Location
The Vaal Catchment Management Area occupies the Central North Eastern are of South
Africa. It extends from Ermelo in KwaZulu-Natal, just west of Swaziland in the east across to
Kuruman in the Northern Cape to the west. To the northwest, the CMA borders Botswana
and the Crocodile (West) and Olifants Catchments. Johannesburg sits on the boundary of
the CMA. To the south east it is bounded by Lesotho and to the South West by the Upper
Orange and Lower Orange catchments.
2.1.1
Major Waterbodies
The Vaal catchment area is split into 3 management areas, the Upper Vaal, Middle Vaal and
Lower Vaal management areas (Figure 2.1).
Figure 2.1 : Water Management Regions in the Vaal Catchment
The Upper Vaal management area has a catchment area of 55 565km2. It is located towards
the centre of the country extending over the Free State to the confluence of the Mooi and
Vaal Rivers, the south east of Mpumalanga and the south West of Gauteng and its southern
limit adjoins Lesotho. It consists of the Vaal, Klip, Wilge, Liebenbergsvlei & Mooi rivers and
includes the Vaal, Grootdraai and Sterkfontein Dams.
3
The Middle Vaal management area has a catchment area of 52 563km2. The area extends
between the confluence of the Vaal and Reitspruit rivers down to the Bloemhof Dam & from
the Schoonspruit River in the north to the Vet River in the south including parts of the Free
State and North West Province. It consists of the Schoonspruit, Rhenoster, Vals and Vaal
Rivers and includes the Bloemhof Dam.
The Lower Vaal management area has an area of 132 000 km2. It extends between the
Bloemhof Dam and the confluence of the Vaal and Douglas Rivers, the North West Province,
Northern Cape and the south west of the Free State, its northern border adjoins with
Botswana. It consists of the Harts River which is the only significant tributary to the Vaal
River.
2.1.2
Land Use Context
The contextual landscape across the Vaal Management area is diverse. Agricultural land is
dominant through 3 management areas, varying from dry and rain fed cultivation on the
Upper Vaal, rain fed cultivation and livestock farming in the Middle Vaal and irrigated and
rain fed cultivation and livestock in the Lower Vaal management areas. Industrial land use in
the Upper Vaal comprises of Petro-chemical plants (Sasol), iron and steel processing (Arcelor
Mittal) as well as 3 coal-fired power stations. The Middle and Lower Vaal areas have no
significant industrial areas, other than support industry to the mines. Mining in the Upper
Vaal area is significant in the north western region, extracting coal, gold, base metals and
industrial minerals. The Middle Vaal has significant gold mining activity, predominantly in
the Free State. The Lower Vaal comprises significantly of diamond and iron ore extraction.
Urban development is fragmented with urban and suburban sprawl developed from and
around agricultural, mining, industrial, recreational developments and political factors.
2.1.3
Main Water Users
Main water use in the Upper Vaal is shared by the industrial, urban and mining sectors,
these account for 80% of water usage, irrigation accounts for 9% and power generation
accounts for 7% the remainder is used for supply to rural areas. The Middle Vaal uses 40%
of the water for irrigation, 30% for urban and industrial sectors, 20% for mining and the
remainder to rural water supply. Water use in the Lower Vaal is mainly used for irrigation
which accounts for 80%, urban and industrial use accounts 12%, 7 % goes to rural supply
and the remainder is used by the mining sector. These figures do not include water transfer
in and out of the management areas. Aside from these usages, water is also transferred in
and out of the Management areas. The Upper Vaal area transfers water out to the
Crocodile, Marico and Olifants Management areas and transfers water in from the Thukela,
Usutu & Mhlatuze Management areas as well as from Lesotho as per the agreement
between South Africa and Lesotho via the Lesotho Highlands Water Project. The Upper Vaal
area has an impact on Botswana, Lesotho, Namibia, Zimbabwe, Mozambique and Swaziland.
The Middle Vaal area has a major influential transfer out of the area into the Crocodile &
Marico catchment area as well as the internal transfers of the Vaal Management area. The
4
Lower Vaal area has many shared water sources between countries; the Molopo River acts
as the border and is shared between South Africa and Botswana, the Lower Vaal also falls
within the Orange River Basin and this basin is shared by South Africa, Lesotho, Botswana
and Namibia. 1
2.2 Topography
The Vaal river slopes gently from about 1 800 m in the east at its origin to 1 450 m in the
vicinity of the Vaal Barrage at Vereeniging. The area between the confluence of the Vaal and
the Rietspruit Rivers and the Bloemhof Dam is relatively flat with a maximum elevation of
about 2 200 m in the hilly upper reaches of the Vals River and a minimum elevation of about
1 250 m in the vicinity of Bloemhof Dam. Pans and other enclosed drainage basins are
features of the western parts. The area between the Bloemhof Dam and the confluence of
the Vaal and the Orange Rivers has no distinct topographic features with most of the terrain
being relatively flat.
2.3 Climate
The mean annual temperature ranges between 16°C in the west to 12°C in the east, with an
average of about 15°C for the catchment as a whole. Maximum temperatures are
experienced in January and minimum temperatures usually occur in July. Rainfall is strongly
seasonal with most rain occurring in the summer period (October to April). The peak rainfall
months are December and January. Rainfall occurs generally as convective thunderstorms
and is sometimes accompanied by hail. Frost occurs in winter and there is occasional light
snow on high lying areas. The overall feature of mean annual rainfall over the Upper Vaal
catchment area is that it decreases fairly uniformly westwards from the eastern escarpment
regions across the central plateau area. Average potential mean annual gross evaporation
(as measured by Class A-pan) ranges from 1 600 mm in the east to a high of 2 200 mm in the
drier western parts. The highest Class A-pan monthly evaporation is in January (range 180
mm to 260 mm) and the lowest evaporation is in June (80 mm to 110 mm). The climatic
conditions vary considerably from west to east across the WMA and effects of climate
change could have impact on the water resources in the catchment.
2.3.1
Rainfall
Considerable variations in climatic conditions occur over the three catchment areas. The
Mean Annual Precipitation (MAP) decreases from 800 mm in the Upper Vaal to 500 mm in
the Middle Vaal and 100 mm in the Lower Vaal catchment area. This tendency is reversed
when considering potential annual evapotranspiration, which increases from 1 300 mm in
the Upper Vaal to 2 800 mm in the Lower Vaal catchment area.
5
2.4
Socio-economic Dynamics
2.4.1
Population
Over the past years, the demographics of the Vaal River CMA have changed significantly
with increasing numbers concentrated around the urban areas. The estimated population
for the Vaal Water Management Area is close to 11 million (see Table 1 below), but the Vaal
River System supplies water to a total population of about 20 million.
The following methodologies were used in order to reflect approximate population figures
stated in Table 1 below:
•
•
•
Geographical information system (GIS);
DWS and WRC catchment data and shape file (mapping ward demarcation); and
Census 2011 statistics for wards.
Population figures were extracted for each of the wards falling within or partially within the
Vaal River catchment boundary. Using GIS, the population of those wards falling only
partially within the Vaal WMA were proportioned on an area basis.
Table 1 : Population in the Vaal River WMA
Catchment
Upper Vaal
Middle Vaal
Lower Vaal
Total Vaal
WMA
Population
7 098 817
1 901 469
1 647 939
10 648 225
Source: Stats SA – Census 2011
2.4.2
Economic Activity
The predominant water requirements in the Vaal River Catchment stem from domestic,
mining and industrial requirements, most of which account for the urban-industrial activity
in the Orange System. Major water users in the rest of the basin include the generation of
hydroelectric power, irrigation and mining (Hall and Jennings, 2007).
Upper Vaal
Widespread urbanisation, mining and industrial activity which relate to gold and coal
deposits in the area occur in the northern part of the water management area. Collectively,
mining and industrial development in the upper Vaal River water management area produce
a total of 45 percent of South Africa’s Gross Domestic Product (GDP). Economic activity in
the rest of the Upper Vaal water management area mostly relates to livestock farming and
rain fed cultivation (Hall and Jennings, 2007; NWRS, 2004 1). Due to ongoing economic
growth and continued urbanisation, further growth in water demand is expected in the
area. It is therefore paramount that water allocation decisions are made, taking cognisance
1
Note that Appendix B giving an overview of economic activity in the Vaal was not updated in the 2013
revision to the National Water Resources Strategy at sub-catchment level.
6
of only marginal potential for further resource development. This area produces about 50%
of South Africa's GDP as well as more than 80% of the country's electricity requirements
(DWAF, 2005, cited in Hall and Jennings, 2007).
Middle Vaal
The main activity in the Middle Vaal water management area is extensive livestock farming,
rain fed cultivation, and some irrigation farming. Economic activity is however dominated
by gold mining in the Klerksdorp and Welkom areas. This sector alone contributes about 45
percent of the GDP in the water management area (NWRS, 2004).
Lower Vaal
The Lower Vaal water management area is primarily an area of iron ore, diamonds and
manganese mining. Farming activities vary from extensive livestock farming and rain fed
cultivation to intensive irrigation operations at Vaalharts (NWRS, 2004), which accounts for
80% of the total water use (Hall and Jennings, 2007). Kimberley, the largest urban centre in
the area with a population of approximately 200 000 people, straddles the divide between
the Lower Vaal and Upper Orange water management areas (Hall and Jennings, 2007;
NWRS, 2004).
2.4.3
Social Drivers
The majority of the social drivers that will impact the CMA revolve around the equitable
access of water in the CMA. The constitutional right of “access to sufficient water” (NWRS2,
2013) is a priority and initiates the Water Allocation Reform (WAR) Program. The aim of the
program is to allocate water to historically disadvantaged genders and races, eradicating
poverty and improve the livelihoods of the poor and marginalized. The CMA’s role in
licencing and validation will allow the monitoring of water allocation and using this
information to allow equitable distribution and use of water within the WMA.
Water quality monitoring by the CMA is also essential, the growing population results in
sanitation problems to informal settlements, resulting in effluent discharge into surface and
ground water. Monitoring pollution of the WMA will not only be the responsibility of the
CMA but will require assistance from the DWS.
There is an increasing threat of acid mine drainage in the upper Vaal catchment area and
growing concern in the middle and lower Vaal catchment areas. This also poses a threat to
water quality of the WMA.
2.5
2.5.1
Water Availability and Requirements
Availability
The current system yield in the Vaal River catchment is around 3 000 million m3/annum.
The available system yield is impacted by a number of factors. In the Vaal River Bulk Water
7
Supply Reconciliation Strategy 2 of 2009 it states that irrigation water requirement makes up
about 37% of the total water use supplied from the Vaal River System and detail validation
studies carried out for DWS indicated that as much as 174 million m3/annum could be
unlawful. The bulk of this unlawful water abstraction is located in the river reach upstream
of Vaal Dam and downstream of the outflow where the water from the Lesotho Highlands
Water Project is discharge into the Ash River from the tunnels. This volume of unlawful
abstraction effectively implies that a large proportion of the additional water available from
Mohale Dam (part of the Lesotho Highlands Water Project) does not reach the intended
users supplied from Vaal Dam.
The Department also conducted an investigation to determine the potential savings that
could be achieved through Water Conservation and Water Demand Management measures
in the urban area. The findings from the study indicated that about 15% savings in urban
water use is possible through implementing loss management measures such as pressure
management, retrofitting and removal of wasteful devices, leak detection and repair, etc. In
addition, it was found that measures to improve the efficiency of urban water use can
reduce the water requirements by a further 15% (total saving of 30% for all Water
Conservation and Water Demand Management measures).
A potential also exists for re-use of up to 80% of the surplus yield in the Crocodile West
River System.
Further, the results from simulation analysis show that re-use of mine water effluent, in
combination with the other interventions, could significantly contribute to solving the
supply shortage between the year 2014 and 2019 and thereby postponing the need for
further augmentation after the implementation of Phase 2 of the Lesotho Highlands Water
Project.
There are currently two alternative infrastructure options that are available for augmenting
supply to the Vaal River system. They are a further phase of the Lesotho Highlands Water
Project (Polihale Dam) and the Thukela Water Project (Jana and Mielietuin Dams). The
decision to proceed with Polihale has been taken and the design phase is expected to
commence by the end of 2014.
2.5.2
Anticipated Requirements
Several requirement scenarios were evaluated during the course of the reconciliation
published in 2009. This led to the identification of actions necessary to improve the
assurance of water supply to the region, based on a range of Projection Scenarios, as
presented hereunder.
2
DWS Report No. P RSA C000/00/4406/09
8
Table 2 - Scenario 1: High (No water loss reduction measures implemented)
Catchment
Sector
Components
Rand Water
Urban
Vaal River
Catchment
Large
Industries
Irrigation
Outside Vaal
River
Catchment
Water Requirement Projections (million m3/a)
2014
2015 2016
2017
2018
2019
853.0
873.1
887.7
901.0
914.3
927.5
Midvaal Water Company
45.0
45.0
45.0
45.0
45.0
45.0
Sedibeng Water
Other towns and small
industries
47.7
48.2
48.7
49.2
49.7
50.3
230.1
238.7
242.1
245.4
248.8
252.2
Eskom
158.8
158.0
152.3
150.7
149.8
151.0
Sasol I
22.3
22.7
23.2
23.7
24.2
24.6
Sasol II and III
82.3
82.6
82.9
83.7
84.6
84.9
Mittal Steel
13.1
13.3
13.5
13.7
13.9
14.2
Vaalharts/Lower Vaal
541.5
541.5
541.5
541.5
541.5
541.5
Other
551.9
551.9
551.9
551.9
551.9
551.9
Losses
Wetland and river losses
327.1
327.4
327.7
327.9
328.2
328.4
Urban
Rand Water
689.4
707.7
718.5
730.0
741.1
752.0
Eskom
224.7
222.9
218.4
218.8
220.0
224.7
3787.0
3833.1
3853.5
3882.6
3913.1
3948.3
Industries
Total
Table 3 - Scenario 2: High – With Eradication of Unlawful Water Use
Catchment
Sector
Components
Rand Water
Urban
Vaal River
Catchment
Large
Industries
Irrigation
Outside Vaal
River
Catchment
2014
2015 2016 2017 2018
2019
853.0
873.1
887.7
901.0
914.3
927.5
45.0
45.0
45.0
45.0
45.0
45.0
Sedibeng Water
industries
47.7
48.2
48.7
49.2
49.7
50.3
230.1
238.7
242.1
245.4
248.8
252.2
Eskom
158.8
158.0
152.3
150.7
149.8
151.0
Sasol I
22.3
22.7
23.2
23.7
24.2
24.6
Sasol II and III
82.3
82.6
82.9
83.7
84.6
84.9
Mittal Steel
13.1
13.3
13.5
13.7
13.9
14.2
541.5
541.5
541.5
541.5
541.5
541.5
Other
476.9
476.9
476.9
476.9
476.9
476.9
Losses
327.1
327.4
327.7
327.9
328.2
328.4
Urban
Rand Water
689.4
707.7
718.5
730.0
741.1
752.0
Eskom
224.7
222.9
218.4
218.8
220.0
224.7
3787.0
3833.1
3712.0
3758.1
3778.5
3807.5
Industries
Total
9
Table 4 - Scenario 3: High – With Eradication of Unlawful Water Use and Water
Conservation and Water Demand Management (WC/WDM)
Catchment
Sector
Components
Rand Water
Urban
Vaal River
Catchment
Large
Industries
Irrigation
Outside Vaal
River
Catchment
2014
2015 2016 2017 2018
2019
814.2
822.0
823.9
824.7
835.9
848.4
45.0
45.0
45.0
45.0
45.0
45.0
Sedibeng Water
industries
47.7
48.2
48.7
49.2
49.7
50.3
230.1
238.7
242.1
245.4
248.8
252.2
Eskom
158.8
158.0
152.3
150.7
149.8
151.0
Sasol I
22.3
22.7
23.2
23.7
24.2
24.6
Sasol II and III
82.3
82.6
82.9
83.7
84.6
84.9
Mittal Steel
13.1
13.3
13.5
13.7
13.9
14.2
541.5
541.5
541.5
541.5
541.5
541.5
Other
476.9
476.9
476.9
476.9
476.9
476.9
Losses
327.1
327.4
327.7
327.9
328.2
328.4
Urban
Rand Water
672.8
684.4
688.5
693.2
703.1
713.6
Eskom
224.7
222.9
218.4
218.8
220.0
224.7
3787.0
3833.1
3656.7
3683.7
3684.7
3694.4
Industries
Total
Table 5 - Scenario 4: High – With Eradication of Unlawful Water Use, WC/WDM and ReUse (Surplus in Crocodile West River System)
Catchment
Sector
Components
Rand Water
2014
2015 2016 2017 2018
2019
814.2
822.0
823.9
824.7
835.9
848.4
45.0
45.0
45.0
45.0
45.0
45.0
Sedibeng Water
industries
47.7
48.2
48.7
49.2
49.7
50.3
230.1
238.7
242.1
245.4
248.8
252.2
Eskom
158.8
158.0
152.3
150.7
149.8
151.0
Sasol I
22.3
22.7
23.2
23.7
24.2
24.6
Sasol II and III
82.3
82.6
82.9
83.7
84.6
84.9
Mittal Steel
13.1
13.3
13.5
13.7
13.9
14.2
541.5
541.5
541.5
541.5
541.5
541.5
Other
476.9
476.9
476.9
476.9
476.9
476.9
Losses
327.1
327.4
327.7
327.9
328.2
328.4
Urban
Rand Water
672.8
671.7
673.2
664.6
647.1
657.6
Eskom
224.7
222.9
218.4
218.8
220.0
224.7
Total
3656.7
3671.0 3669.5
This data has been updated and is provided by courtesy of DWS.
3665.9
3665.6
3699.7
Urban
Vaal River
Catchment
Large
Industries
Irrigation
Outside Vaal
River
Catchment
Industries
10
Figure 2.2 below is a summary of the net demand projections in the Vaal River Catchment.
(Excluding supply outside of the catchment)
Figure 2.2 : Net Demand Projections for the Vaal River System
2.5.3
Water requirements vs. availability
As can be deduced from the above, the availability is very dependent on the successful
implementation of a number of mitigation factors, such as the eradication of unlawful use,
Water Conservation and Demand Management (WC/WDM) initiatives, re-use of effluent
and desalinated mine water and the introduction of the augmentation options. The
eradication of unlawful use, WC/WDM and re-use of treated effluent and mine water are
issues which will fall within the jurisdiction, monitoring and control of the Vaal River CMA.
The construction of Polihale Dam on the Senqu River, as part of Phase 2 of the Lesotho
Highlands Development Project is unlikely to come on stream until 2020 and therefore the
focus of the financial analysis in this business case study is focussed on the years leading up
to 2020. The extent of the supply deficit is highly dependent on the success of the proposed
mitigation strategies, as is evident from the scenarios in the following figures. There are
also challenges to be overcome in replacing the lost yield in the Senqu River to the Orange
River System as a result of supplying water to the Vaal River System.
The following figures (Figure 2.3, 2.4 and 2.5) indicate the impact of various mitigation
measures on the availability of water in the Vaal River System.
11
Figure 2.3 : Projected Water Requirements vs Availability: WC/WDM implemented and Unlawful
use eradicated
eradicated, Desalinated Mine water added.
12
eradicated, Desalinated Mine water added and Re-use from Crocodile West.
2.5.4
International Considerations
Since the Vaal River is one of the largest contributors to the Orange River system, the
management of the Vaal River falls within and is subject to the international agreements
reached with neighbouring Lesotho, Botswana and Namibia. These agreements define the
responsibilities of the upstream authorities with respect to both quantity and quality of
water released downstream, the monitoring of which will need to be addressed as part of
the CMA catchment management strategy. The transboundary agreement covers the
Establishment of the Orange Senqu River commission and specifically includes:
•
•
•
•
•
•
•
•
•
Article 1 – The establishment of the commission;
Article 2 – Institutions of the commission;
Article 3 – Meetings of the council;
Article 4 -6 – Objectives, functions and powers of the council;
Article 7 – Obligations of the contracting parties;
Article 8 – Settlement of disputes;
Article 9 – Withdrawal;
Article 10 – Financial arrangements; and
Article 11 – General provisions.
13
3. Challenges
The Vaal River system is crucial to South Africa, this system supplies water to 60% of the
country’s economy and 45% of the population of the country (NWRS2, 2013). This includes
Gauteng, the mines and industry of Mpumalanga and the bulk of the Eskom coal fired
powers stations. The Vaal River further also supplies the North West province, the gold
mines in the Free State and Kimberly. The Vaal River is a complex system with not only
receiving runoff from its own catchment area, also receiving transfers from other systems
such as the Lesotho Highlands, the Thukela and also transferring water to systems such as
the Crocodile-Marico and the Olifants.
The Vaal River system, with its runoff and transfers (in and out) is currently at maximum
capacity and efforts have to be made to address and reduce the usage of the available
capacity that exists in the system or to augment the supply.
In addition to the technical challenges there are also a number of operational challenges
that will be material to the CMA board’s approach to structuring and operating the CMA.
3.1
3.1.1
Technical Challenges
Balancing Inequity Issues
The estimated population of the Vaal River CMA is in the order of 11 million in terms of the
Census data of 2011. The socio economic data of the area reveals that, in terms of income,
education and access to services, a great disparity exists. Although the area consists of large
urban areas, quite a large portion of the population live in informal areas, due to the rapid
urbanisation of the region, and thus poverty levels are quite high. This disparity may cause
political tensions as the informal residents can feel neglected and not receiving services. The
CMA will thus have to ensure that the demands of informal and rural areas are also met as
well as the urban areas.
In the experience of the Inkomati CMA a continued lack of infrastructure (small dams,
canals, off-stream storage, etc.) and extension support in some areas entrenches and
exacerbates the imbalances of the past and the plight of the historically disadvantaged. The
CMA will need to look to redress this balance.
Furthermore non-compliance by developers and mining, and continued lack of law
enforcement are negatively impacting on socio-economic development and rapidly reducing
the sustainability of water resources. (Issues in need of law enforcement include illegal
water abstraction and waste dumping; illegal land use within wetlands and riparian zones;
illegal regulation of rivers and drainage of wetlands; illegal fishing, hunting, harvesting of
medicinal plants; etc.)
14
3.1.2
Sanitation
The Minister has highlighted the crucial importance of sanitation being a basic human right
in the National water and Sanitation summit 2014 and is a major focus of the 2014/15 DWS
budget. The aim is to eradicate the bucket system by December 2014 and though significant
progress has been made, it is recognised that this target will not be met and has therefore
been extended to 2015.
The report on the status of sanitation services in South Africa (2012) provides an indication
of the extent of lack of sanitation services to the Vaal WMA. Many of the informal
settlements dispersed through the WMA have no formal sanitation infrastructure or
services. This is further reinforced by a study conducted by the South African Human Rights
Commission.
The following table indicates the status of sanitation in South Africa:
RDP-Acceptable
Not RDP-Acceptable
Province
Flush
Toilet
Chemical
Toilet
Ventilated Pit
Latrine
Unventilated
Pit Latrine
Bucket
Latrine
None
Free State
67.10%
0.60%
87.00%
13.50%
5.50%
3.10%
Gauteng
85.40%
1.10%
2.40%
7.40%
1.80%
1.10%
North West
45.40%
0.80%
11.30%
34.20%
1.00%
5.80%
Northern Cape
66.00%
0.60%
9.10%
10.70%
4.00%
8.00%
South Africa
60.10%
2.50%
8.80%
19.30%
2.10%
5.20%
Access to Sanitation, by Province as at October 2011 (Report on the Right to Access Sufficient Water and Decent Sanitation in
South Africa (2014))
As the 2011 report by the South African Human Rights Commission identifies, within the Vaal the
proportion of people without access to adequate sanitation is higher in the Middle and Lower Vaal
CMA’s than the Upper Vaal.
As the bucket system diminishes and sanitation becomes more formalised, there will be an
increase in the volume of water used by individuals. This may have implications for the
overall water balance and should be considered within the Catchment Management
Strategy. Furthermore formalisation of sanitation systems may result in positive implications
for water quality in the catchment through better control of sewerage systems.
The CMA should play a proactive role in assisting with various government initiatives to
alleviate the sanitation issues within the Vaal WMA, this will require commitment, constant
engagement and communication to ensure that this basic human right is met.
3.1.3
Unlawful Use & Enforcement
Unlawful use of water for irrigation purposes, largely by commercial farmers, poses a
significant challenge to the sustainability of water resources in the region. In order for the
Vaal River system to maintain a constant supply, prior to the implementation of the Phase 2
of the Lesotho Highlands project, the unlawful use of water for irrigation of crops must be
15
controlled. To address this situation the Department instituted the Reconciliation Strategy in
2009 with a strategy steering committee formed in July 2009. In terms of the Reconciliation
Strategy it is estimated that 175 million m3/annum is lost due to the unlawful use of water.
Regulations have been proposed to assist with the enforcement of this action.
The Annual Performance Plan for the Inkomati CMA highlights that little progress has been
recorded to date with regard to the transformation of the Irrigation Board and the
associated establishment of Water User Associations. The lack of progress is attributable to
limitations in funding as the CMAs are not in a position to support the post-establishment
administrative as well as other running costs. Some legal issues in terms of the National
Water Act (36 of 1998) also contributed to this problem.
In practical terms the structure of water users within the Vaal WMA may have an impact on
the makeup or distribution of skills across the CMA. In particular it is noted that the Upper
Vaal has a higher proportion of large scale bulk, industrial users (e.g. Eskom, SASOL, Mining
Houses) who are easier to manage in terms of monitoring and enforcement than smaller
scale, geographically disparate users such as might be found in the lower reaches of the
catchment.
3.1.4
Conservation and Demand Management
An important issue that is currently being addressed is Water Conservation and Demand
Management. Currently losses are estimated at being around 36%. The Department has set
a goal of saving a total of 15% by 2015, thus alleviating the water shortage prior to the
second phase of the Lesotho Highland project coming online. This issue will be addressed
mainly by the municipalities that are supplied from the Vaal River system and has an
objective of saving at least 195 million m3/annum by 2015. Although significant progress has
been made with through management of water in the City of Johannesburg, there is
constant increasing demand which has raised the priority of water conservation and
demand management to avoid future water restrictions. The City of Johannesburg has to
save at least 110 million m3/annum. Further to this the City of Tshwane has achieved the
interim targets set, while the Ekurhuleni Metropolitan Municipality are achieving savings
but are not meeting the targets required. One of the major water users in the area, Rand
Water Board, has indicated that an increase in the demand from their user will be sought,
this however will not be feasible with the current water availability; and it has been
suggested that Rand Water Board implement water saving measures through its various
user to lessen the chance of water restrictions.
3.1.5
Use of Return Flows
A further proposed mitigation measure to address potential shortages in supply that may be
implemented is the re-use of water from the return flows from the various Waste Water
Treatment Plants within the various municipal areas. This will have the effect of placing less
of a strain on existing raw water sources, but the “withholding“ of return flows may affect
downstream areas or other systems, an example being the Crocodile River system that has
16
sufficient capacity with return flows, but would experience a shortage without such return
flows.
3.1.6
Acid Mine Drainage
Acid mine drainage refers to the outflow of acidic water from metal mines or coal mines.
Acid rock drainage occurs naturally within some environments as part of the rock
weathering process but is exacerbated by large scale earth disturbances characteristic of
mining and other large construction activities, usually within rocks containing an abundance
of sulphide minerals.
In South Africa, AMD has long been identified as a threat in numerous locations. As a result,
an Inter-Ministerial Committee (IMC) has been established to advise the Government on
AMD. The IMC appointed a Team of Experts to assess and appraise the situation, which
made recommendations to the IMC in their report dated December 2010.
The report identified certain critical actions to be taken to address the risks related to AMD
in the Witwatersrand. The scope encompassed the three basins in Gauteng namely,
Western, Central and Eastern.
The overall strategy has been divided into short term interventions to address immediate
risks associated with mine water decant (i.e. contaminated groundwater essentially
overflowing into the surface water system with “Short Term Interventions”, while a longer
term strategy for the sustainable management of AMD is developed and implemented.
The overall programme for the three basins are is set out in the 2013 newsletter
summarising the recommendations of the feasibility study. This is summarised below:
Western Basin:
•
•
Phase 1 A (STI): From 2012 – Upgrade Neutralisation Plant to 32Ml/D capacity;
Phase 1 B (STI): 2013 – Upgrade Neutralisation capacity to ± 40Ml/D and install
permanent clarifier and permanent pumps. Alternatively implement joint neutralisation
process within mining sector, such as “Mintails” Process;
• Phase 2 – For 5 to 7 years – Construct ancillary works and commission pilot treatment
plants (each 5 to 10 Ml/D) to develop Innovative Technologies;
• Phase 3 – 25 years – procure new operating contract and process with the lowest
lifetime cost; and
• Phase 4 – 25 years - procure new operating contract and process with the lowest
lifetime cost.
Central Basin
•
•
Phase 1A (STI) – From 2013 – HDS for ± 46Ml/d;
Phase 2 – 2016 – Operating contract for 10-15 years with a solution that is likely to
include conventional RO;
17
•
Phase 3 – 25 years – procure new operating contract and process with the lowest
lifetime cost; and
lifetime cost.
Eastern Basin
•
•
Phase 1A (STI) – From 2014 – HDS for ± 80Ml/d;
Phase 2 – 2016 – Operating contract for 10-15 years with a solution that is likely to
include conventional RO;
• Phase 3 – 25 years – procure new operating contract and process with the lowest
lifetime cost; and
lifetime cost.
The implementation of the Short Term Interventions is being executed by the TransCaledonian Tunnel Authority (TCTA).
The progress made to date (as reported in the TCTA Annual Performance Report for
2013/2014) is as follows:
Western Basin
Capacity increased to 30-36 Ml/D and discharge of effluent in line with standards set in
directive. A further increase in capacity is targeted.
Central Basin
Infrastructure is ready for commissioning as from February 2014.
Eastern Basin
Proposal for funding through the Vaal River tariff has been submitted and awaiting
approval.
The process to determine the implementing agency for the Long Term Solution is ongoing. It
is clear that the Vaal River CMA is unlikely to hold specific responsibility for the
implementation of proposed infrastructure schemes.
There are three elements of the treatment of acid mine drainage which are specifically
relevant to the operation of the Vaal River CMA. These are:
Management of untreated decant and water produced from treatment schemes which is
subsequently discharged into the Vaal River System;
Prevention/management of risk from future operations through the licencing and
monitoring programme; and
Consideration of the output from treatment plants as a resource.
18
The government has made the decision to implement AMD treatment on an off budget
basis to address short term recommendations following the assessment and appraisal of the
AMD situation. The decision in part takes into account the urgency necessary to restore
supply security in the Vaal River System. Further detail on implications for funding is
described in section 3.2.5 below.
3.1.7
Quality Management
The quality of the water in the Vaal River system must be carefully controlled as the system
provides water to a large area of the country. To ensure that the quality of the water is
achieved an Integrated Water Quality Plan for the Vaal River system exist, but has yet to be
implemented. Potential problems with management of the quality of water will arise due to
the large industrial and urban settlement patterns that exist in the catchment area. The
CMA will thus have to ensure that the quality of water that is being returned to the system
by industrial user is of such a quality that future supply is assured. To deal with these
challenges the Vaal River CMA will have to develop a policy and process for water quality
management. The process will not only involve the CMA but the community, affected
parties as well as industry will be involved to achieve water quality objectives. The water
quality strategy for the CMA will include issues from the whole spectrum of the water cycle
including drinking water quality, monitoring, groundwater, rural land uses and water
quality, storm water, sewage systems, Waste Water Treatment Plant return Flows and
effluent control for industries.
3.1.8
Invasive Species
The CMA will also have to address issues such as alien vegetation, which although not a
prevalent in the Vaal River System, does have an impact on the quality and quantity of
water that is available for usage in the system.
3.2
3.2.1
Operational Challenges
Turn-around of Licence Applications
While DWA has managed to significantly reduce the backlog in water use licence
applications, there is a challenge in streamlining the process to ensure and maintain an
efficient, equitable and effective authorisation process and to prevent a new backlog from
developing (NWRS2, 2013).
Within Regional Steering Committee Meetings for the Vaal, the issue of faster turnaround
for licences has been raised several times and it is clear that the Vaal River CMA will need to
meet the expectation of water users that processing times will become more reliable.
3.2.2
Financial Independence
Although it is envisaged that the CMA should be financial independent, the funding that it
will receive from water charges will not be sufficient to cover the cost associated with the
work that needs to be undertaken by the CMA. It is envisaged that the CMA will take over
19
the trading accounts of the Gauteng, Free State and Northern Cape regional offices
(associated with the Vaal River system) but that this will have to be augmented from the
fiscus.
3.2.3
Levels of Engagement
There is generally low skills base on water resource management particularly from
previously disadvantaged communities; this creates a challenge in terms of engagement and
understanding of the objectives of the CMA.
Despite the willingness and commitment of some, there is a high degree of public
discontent, scepticism and resultant apathy towards water resource issues. This is clearly
related to both the perceived and actual poor progress in implementing the requirements of
the National Water Act and Integrated Water Resources Management. There is a serious
threat of these water issues leading directly to civil protest and unrest.
3.2.4
Integrated Catchment Planning
The interactions between the various planning mechanisms in place across the WMA are
complex. They span technical, geographical and political boundaries. While the CMA will be
responsible for the development of the key plan for water resources management within
the catchment (the Catchment Management Strategy), this will need to interact with many
other agencies focused on broader developmental issues.
The NWRS2 document refers to the need for water to be at the centre of development
planning and identifies that development planning needs to be geared towards realisation
of the water sacristy issues in South Africa. It also identifies that there is a lack of priority
given to water management issues reporting an “assumption that water is readily available
at minimal cost, resulting in ineffectual planning and unrealistic developmental
expectations”. This issue is further reflected in the experience of the existing CMAs, with the
annual performance report for the Inkomati CMA identifying that “Ineffective cooperative
governance at national, (Departments of Water and Environmental Affairs, Department of
Agriculture, Forestry and Fisheries, Department of Mineral Resources), provincial (e.g. land
use planning) and local (service delivery) levels is undermining the management of water
resources for improved equity, efficiency and sustainability.”
The Vaal River CMA will need to take a leading role both in stakeholders in broader planning
roles for the development of the CMA, but also taking a proactive role in contributing to the
development of municipal, provincial and other planning processes, to meet the
requirement of NWRS2 that “Water and its management are an integral part of [sic.]
development planning and frameworks.”
3.2.5
Pressure on Tariffs from Infrastructure Projects
Revenue generated from the Vaal River Bulk Raw Water Tariff facilitates a range of functions
including management, augmentation, betterment, operations and maintenance of water
20
resources within the Vaal River system. The viability and sustainability of water
infrastructure projects aimed at augmenting the Vaal River system, will directly impact the
tariff levied by water users.
The Government’s decision to fund a number of augmentation projects off budget
necessitates the need to recover the capital and operation costs through consumer tariff
increases. This stems from the view that the benefits of water quality improvements and
supply security are largely enjoyed by consumers; however there is recognition of
reluctance among Vaal River system users to unilaterally fund augmentation activities.
Augmentation projects currently funded off budget include:
Lesotho Highlands Water Project – Phase 1;
Lesotho Highlands Water Project – Phase 2; and
Acid Mine Drainage Treatment.
Phases 1 and 2 of the LHWP will be delivered through revenue from a capital unit charge
(CUC) and a bulk operations and royalty (BO&R) charge levied on consumers as part of the
Bulk Raw Water Tariff. Funding of AMD has been recently authorised (April 2014) and will
impact CUC and BO&R charges in 2015/16.
While these schemes may have an impact on the overall cost of water to users in the
catchment, it is considered to be budget neutral in terms of the CMA’s revenue and costs as
it will not form a part of the Water Resources Management charge levied by the CMA.
21
4. Strategic Motivation
4.1 Policy context
The 1997 White Paper on a National Water Policy for South Africa states that the National
Government is “custodian of the nation’s water resources and its powers in this will be
exercised as a public trust”. In exercising its mandate, DWS must reconcile, integrate and
coordinate diverse and often conflicting interests of different stakeholders, within the
framework of sustainable and equitable utilisation of South Africa’s water resources.
National Government, and the Department of Water and Sanitation, in particular, are
therefore tasked with ensuring sustainable and equitable use, protection, conservation,
development and management of water in the public interest. The Minister is mandated to
establish institutions to perform these water resource management functions.
In line with the developmental objectives of the National Government the role of the DWS
can be summarised as follows:
Develop equitable and sustainable water policy and strategies;
Plan for the future and balance supply and demand;
Ensure infrastructure was developed and managed;
Allocate water and ensure redress and equitable access;
Ensure provision of basic water supply and sanitation services to all;
Regulate water use and the impacts on water; and
Ensure water sector institutions perform effectively.
The CMAs, in turn, are statutory bodies, established in terms of the National Water Act (No
36 of 1998) and are subject to the Public Finance Management Act (No. 1 of 1999) (PFMA)
and the main strategic reason for the establishment of the CMAs is to ensure the
management of water resources at a local level. This follows the philosophy of subsidiarity
which presents that a central authority (in this case the DWS) should have a subsidiary (that
is, a supporting, rather than a subordinate) function, performing only those tasks which
cannot be performed effectively at a more immediate or local level.
The need for a change to decentralisation was based on the issues and outcomes of a study
conducted in 2007, where the DWS was reviewing the institutional arrangements within the
water management sector. This was prompted by poor service delivery at local level due to
a lack of capacity, the fragmented institutional arrangements of the sector, the limited
capacity of water sector institutions to perform in accordance with legislation and the poor
implementation of legislation and policy.
Further detail on the legal basis for the establishment of the CMA is provided in chapter 6.
22
4.2
4.2.1
Technical Benefits
Management according to hydrological boundaries
De-politicising of water management areas, by having them defined by catchment boundary
rather than political boundaries, is internationally recognised as lending itself to more
effective IWRM. While there may be bulk transfers both into and out of the catchment, as is
the case in the Vaal River System, water issues at a local level, particularly with regard to
water quality, abstractions, protection of eco-systems and the like, require solutions which
are catchment based and which can be managed and monitored by at catchment level. A
Catchment Management Agency is expected to be more effective at achieving this than a
national or provincial body. Bulk transfers, on the other hand, are more effectively managed
at a regional or national level, as an example of escalated IWRM.
4.2.2
Improved Stakeholder Involvement
There are a number of reasons for the participation of stake holders in the management of
water resources. It is not only required by South African policy and legislation, but as we
progress as a leading developing country, it is considered best international practice. The
Vaal River CMA faces complex and specific issues and the participation of stakeholders is
essential to get a better understanding of the needs as well as develop relevant solutions to
these issues within the Vaal water management area and consequently, reinforce public
confidence. The need for ongoing stakeholder engagement will ensure that relevant matters
are being addressed, a strategy that is essential particularly regarding the communities of
our troubled past.
Part of the responsibility of the CMA is to continuously engage with all of the stakeholders
and users in the catchment. The purpose of this engagement is to actively involve all
relevant stakeholders, down to the lowest appropriate level, in the decision making process.
4.2.3
Developmental / Empowerment Benefit
Involving stakeholders in the decision-making process and the management of water
resources through decentralized water resource management will contribute significantly to
the redress of historical inequities and support the equitable allocation and effective
management of this limited resource. International best practice has shown that
decentralised institutions often have a greater developmental and empowerment role than
centralized institutions. Decentralised institutions have a greater ability to respond to
developmental needs and opportunities on the ground as a result of reduced bureaucracy
and smaller, more effective organizations.
4.2.4
Public confidence in decision making
The definitive goal of water resource management is the beneficial use of water for the
public’s interest. This goal reinforces public confidence, so that the end users gain the most
through the viable management of the CMA. The current arrangement of governmental
accountability is not as effective as the stratified accountability achieved with the
23
establishment of a CMA. The Vaal water management area is a crucial element to the
economic growth of South Africa and accountability and appropriate governance of the
water management area will strengthen public confidence. The end result is the DWS
functioning as the regulator of tariffs and setting a national standard for operation and
management of this resource.
4.3
4.3.1
Operational Benefits
Improved institutional arrangements
The creation of a new organisation provides an opportunity to create institutional
structures, free from “institutional baggage” which may be encountered in an existing
organisation, to implementation more efficient and effective service provision. By drawing
on existing DWS staff, critical institutional knowledge is transferred, however creation of
focused and well mandated team within the CMA
4.3.2
The isolation of risk
Through the establishment of a public entity, management of risk and confident governance
will be attained. Of all the risks facing the DWS, financial risk will be best managed outside
of government; this will be done through effective billing, tariffing and revenue collection.
As a public entity, it is in the best interest of Vaal River CMA to manage these financial risks
efficiently through feasible means. The financial viability will be discussed in a later chapter.
4.3.3
Access to Professional and specialist skills
For the Vaal River CMA to operate optimally, it requires access to specialist and professional
skills within the financial management, contracts management and water resource
management operations. The specific requirements of the Vaal River CMA legitimise the
need to move outside the government remuneration structure enabling the Vaal River CMA
to be innovative and conducive to solving the areas specific problems.
24
5. Implementation Strategy
5.1.1
Legal basis
The transformation of the legal systems was a fundamental part of the political events
arising out of the end to the apartheid era in 1994 (de Lange 2001). Under the leadership of
the then Minister of Water Affairs and Forestry (Professor Kader Asmal), a process was
launched to incorporate public views nation-wide and to harness global knowledge for the
formulation of the National Water Act, which was finally promulgated in 1998. These
globally recognized ‘best principles for integrated water management’ include the
integration of surface and groundwater management, the gradual decentralization of water
management to the lowest appropriate level and self-financing of water management by
user groups, public participation and community involvement, the preservation of
Implementation Strategy
This section of the business case discusses the principles, policy and legal framework
necessary to establish catchment management agencies.
5.1.2
Principles
The establishment of CMAs in South Africa reflects a significant change in the approach to
IWRM, from the past. This represents a major opportunity to give effect to the new
paradigm captured in both the government transformation and IWRM policies and
legislation. The framework for the establishment of a CMA is guided by the following
principles:
The democratic government must contribute to social and economic development and the
eradication of poverty in South Africa;
The NWA and policy requires equity, sustainability and efficiency in the access and use of
water resources and the activities of the institutions established for their management;
Transformation of the public service (Batho Pele) and the new paradigm (and functions) of
WRM (NWA and policy), requires institutional, organisational and cultural transformation
from the way in which water resources were managed in the past;
In particular this implies a paradigm shift to an approach based on integrated water
resources management (IWRM), stakeholder involvement/participation in decision making
(empowerment of citizens), and cooperative governance; and
CMAs (and other water institutions) must develop a service delivery orientation (Batho
Pele), which must reflect a commercial orientation to the business of water resources
management (taking account of government’s social objectives for the water sector).
These principles imply that as an institution, the CMA must:
Develop legitimacy as the key IWRM institution in the WMA, with a social development
focus, based on equity, sustainability and efficiency;
25
Entrench the required paradigm shift to IWRM in the institutional arrangements and
organisational structure, as the organisation evolves to perform additional functions;
Facilitate cooperation between organisations involved in IWRM and participation of
stakeholders in IWRM decision making;
Be institutionally focused, organisationally efficient and customer services oriented, in
performing delegated IWRM functions, while considering the various interests of water
users and stakeholders in the WMA; and
Be representative of the demographics in the WMA, in the governing board, the staff and
contracted organisations, while developing and retaining adequate management, technical
capacity to perform its functions.
5.2 Evolution of the CMA
A framework for the Establishment of Catchment Management Agencies was developed by
the then Department of Water Affairs in 2012. This document highlight the principles
guiding reform and transformation in resource management, and the legal requirements of
decentralisation and subsidiarity contained with the NWA and imply a process of
institutional change in the management of water resources. This process moves the
responsibility for resource management from DWS to the CMA as the catchment-based
organ of state. A number of stages can be identified that describe this process of shifting
responsibilities and the evolution of the CMA.
The first stage following the establishment of the CMA is about creating legitimacy within
the WMA, during which relationships are developed between the CMA, other water
management institutions (WMIs) and stakeholders in the WMA. The CMA undertakes the
critical role of advising on, and coordinating water resource management, and developing
the catchment management strategy (CMS). This stage is about building relationships, and
establishing credibility and legitimacy within the WMA. The CMA assumes a number of
initial functions, as defined in Section 80 of the NWA:
to investigate and advise interested persons on the protection, use, development,
conservation, management and control of the water resources in its water management
area;
to develop a catchment management strategy;
to co-ordinate the related activities of water users and of the water management
institutions within its water management area;
to promote the co-ordination of its implementation with the implementation of any
applicable development plan established in terms of the Water Services Act, 1997 (Act No.
108 of 1997); and
to promote community participation in the protection, use, development, conservation,
management and control of the water resources in its water management area.
In order to perform these functions, the CMA has some inherent powers under the NWA:i.
the powers of a natural person of full capacity (Section 79(1));
26
ii.
a range of powers related to planning and conducting the routine administrative and
organisational business of the CMA (Schedule 4); and
iii.
powers to make and recover charges in terms of the Minister’s pricing strategy for
water use charges to cover their costs in executing (at least) the initial functions
(Section 84(1)).
Following legitimisation of the CMA, a phase of consolidation is entered during which the
CMA is focused on building capacity and strengthening the organisation to undertake its
water resource management functions. This implies strengthening of systems within the
organisation, including fiduciary management and governance of the CMA, and the
establishment of stable information and implementation systems. Additional water use
management functions are delegated to the CMA. Proto-CMA staff, possibly seconded to
the CMA during the legitimisation phase, are now transferred to the CMA as a coherent
business unit, with the requisite infrastructure and budget. The CMA (led by the Governing
Board and CEO) should compile its comprehensive business plan. This must also link to the
DWS timeframes for establishing water use charges (under the Pricing Strategy).
The final phase during the evolution of the CMA is the delegation or assignment of
responsible authority functions3 as contemplated in sections 73 and 63 of the National
Water Act. The majority of water resource management and implementation roles and
responsibilities are now seated in the CMA, which assumes the role of Responsible
Authority. The relationship between the CMA and DWS is well established, and the systems
and processes within and between these institutions are stable. Under Section 73(1)(a) of
the NWA, the Minister can assign the powers and duties of a responsible authority to a
CMA. The most significant of these are the powers and duties related to authorisation of
water use and the issuing, review and amendment of licences. In Section 63 of the NWA,
there is provision for the delegation of powers and duties vested in the Minister 4, rather
than assignment. However, the Minister is prohibited from delegating certain powers under
Section 63(2)5. In addition to providing the legal basis to the CMA performing its functions
3
The powers and duties of a responsible authority are described as:- i) issue general authorisations and licences in respect
of water use subject to conditions, ii) extend the licence period under certain conditions, iii) review licences at periods
stated in the licence and make amendments to its conditions or renew it, iv) waive the need for a licence if the water use is
authorised under another law, v) promote “one-stop shop” licensing, vi) require license applicants to provide security for
licence obligations, vii) require registration of existing lawful water uses, viii) require an existing water user to apply to
verify its water use, ix) undertake compulsory licensing where there is water stress, x) suspend or withdraw entitlements to
use water and xi) enforce licence conditions.
4
Some additional powers and duties may be delegated to the fully-functional CMA, as described in Schedule 3 of the NWA:i) power to manage, monitor, conserve and protect water resources and to implement the CMS, ii)establishment of wateruse rules, iii) establishment of management systems, iv) require alterations to waterworks and may direct users to
terminate illegal use and v) temporarily control, limit or prohibit the use of water during periods of water shortage.
5
i) the power to make a regulation, ii) the power to authorise a water management institution to expropriate under
Section 64(1) of the NWA, iii) the power to appoint a member of the Governing Board of a CMA and iv) the power to
appoint a member of the Water Tribunal.
27
in its WMA, the NWA also allows the CMA to perform functions outside its WMA, under the
condition that this does not impinge on the execution of its functions or detrimentally affect
other water management institutions.
5.3 Transfer of functions
In practical terms the process above has been adapted to aid a smooth transition from
departmental execution of the functions required by the CMA, to independent operation of
the CMA. The following flow chart summarises the proposed stages.
Stage
DWS
CMA’s”
Description
Timeline
“Proto- Establishment of teams within regional offices of Current Status
DWS (Northern Cape, Free State and Gauteng) to
perform technical Catchment Management
functions within existing structures. This is
primarily technical and draws on administrative
support from the wider department.
Ring-fencing
of Ring-fencing of individuals and associated April 2015
“Proto-CMA” staff budgets to create a semi-autonomous internal
structure, performing the tasks of the CMA but
under the direct control of the Department. It is
during this phase that the process of building
establishing legitimacy and consolidating
technical ability will commence.
Appointment
CMA boards
of Appointment of boards as the first step to 2016
creating the independent CMA. The board will
begin performing initial functions and positioning
for the delegation of functions from the
Department. There will be then a further task of
establishing the board’s legitimacy as an
independent body beginning to implement the
principles of subsidiarity.
Delegation
functions
of Ultimately the staff operating under the umbrella 2016
of the Department’s “Proto-CMA” will be
transferred into the new 3a entity as an
independent agency and will continue to deliver
the CMA functions, but under the guidance of the
CMA board and not the department. At this stage
we may expect to see a divergence in structure
and practice within the CMA as the Board’s
28
independent leadership is implemented.
5.4 Status of CMAs in the Vaal Water Management Area
The Upper, Middle and Lower Vaal catchment areas have been legally established on paper.
However, due to delays in rolling out the CMA process, these CMAs have not yet been
established. With the redefining of the 19 WMAs into 9 larger units, the Upper, Middle and
Lower Vaal catchment areas are now merged into one WMA and will be managed by a
single Vaal River CMA.
29
6. Legal Process
6.1.1
Introduction
The transformation of the legal systems was a fundamental part of the political events
arising out of the end to the apartheid era in 1994 (de Lange 2001). Under the leadership of
the then Minister of Water and Sanitation and Forestry, a process was launched to
incorporate public views nation-wide and to harness global knowledge for the formulation
of the National Water Act, which was finally promulgated in 1998. These globally recognized
‘best principles for integrated water management’ include the integration of surface and
groundwater management, the gradual decentralization of water management to the
lowest appropriate level and self-financing of water management by user groups, public
participation and community involvement, the preservation of water for ecological
purposes, and the shift from administrative to hydrological basin boundaries for water
management, ultimately to be implemented by Catchment Management Agencies.
The National Water Act (1998a) highlights the following components that are most relevant
to the legal basis for the establishment and responsibility of CMAs:
a. Redress of Inequities of the Past based on Race and Gender: The basic human right that
—‘Everyone has the right to have access to sufficient food and water’— is firmly rooted in
Section 27 of the new Constitution of South Africa (RSA 1994) and subsequently enshrined
in the National Water Act. Throughout the Act, the principle of ‘redress of racial and gender
inequities from the past’ is mentioned as a main criterion for South Africa’s new integrated
water resources management.
b. Basic Human Water Needs: The National Water Act stipulates that the government must
allocate a Reserve for basic human consumption needs before any other use. A similar
priority allocation is made for the Ecological Reserve.
c. Demographic Representation: According to the National Water Act, governance bodies
should be representative in terms of including sections of the population that were
previously unrepresented in governance forums—especially, blacks and women. The
Minister of Water and Sanitation and Forestry has far-reaching powers to ensure
demographic representation in new legal governance structures such as CMAs.
d. Cooperative Governance: A general government policy in South Africa, which is crucial for
rectifying race and gender inequities through water law, is the emphasis on strong
horizontal and vertical ‘Cooperative Governance’. This entails cooperative governance both
within government agencies, in this case coordination between the various divisions within
DWS, such as Water Supply, Water Quality, Groundwater, Catchment Management
Agencies, Resource Planning, Modelling, etc., and among the various government agencies,
of which the CMAs form part.
30
e. Water Reallocation: A legal tool in the National Water Act that allows reallocation of
water from high-volume users to poor water users is termed Compulsory Licensing. DWS
can call for ‘compulsory licensing’ where and when needed.
6.2 Legal requirements
The National Water Act, Act 36 of 1998 Chapter 7 allows for the progressive establishment
of CMA’s throughout South Africa. A significant step towards the establishment of a CMA is
the proposal (this document) that is required in terms of section 77 of said Act. The main
issue of this document is not if a CMA should be established but rather a proposal on the
type of CMA that will be required to ensure that water resources are utilised viable and
sustainable. This coupled with the input and partnership with the various stakeholders (also
called Interested and Affected Parties, which will include communities) is imperative for the
sustainability of such a CMA.
In terms of section 77 of the National Water Act, Act 36 of 1998, the following issues needs
to be addressed in terms of a Business Case of a CMA:
• The proposed functions that the CMA will be required to fulfil including functions that
will be assigned or delegated;
• The proposed funding model of the CMA, which can include user charges or subsidies
from the fiscus; and
• The feasibility of the CMA based on factors such as technical, financial and
administrative matters.
For the above criteria to be met the Business Case will look at the following issues that will
influence the CMA:
• The functions of the CMA cannot be transferred as a once off issue but will have to be
progressively transferred from the current organisation(s) that is performing the
function to the CMA, this may also include the transfer of staff and funding that may be
allocated to an organisation;
• The CMA cannot be established once off with all staff, offices, funding and functions but
rather a progressive establishment with capacity building and evolution from the current
state to the new state that is envisaged. This will include the institutional capacity
building and co-operative governance with not only stakeholders within the CMA but
also with neighbouring stakeholders and CMA’s that can and will influence the CMA;
• Although user charges have been defined and are being charges, these may have to be
adapted to ensure the viability of the CMA over the long term; and
• The CMA must be based on the participatory input from the various stakeholders (inside
and outside its borders).
31
The above approach will ensure that the CMA will not only be viable in the long term but
will ensure a holistic approach to taking into account issues around technical, administrative
and financial matters that will affect the CMA.
6.3 Establishment of the Vaal River CMA
After the Minister has indicated that the Vaal River CMA will be established, this CMA will
include the Upper, Middle and Lower Vaal Areas. The CMA will be known as the Vaal River
CMA.
In this instance the CMA will be the Vaal River system comprising of the:
•
Upper Vaal-including the Vaal, Klip, Wilge, Liebenbergsvlei and Mooi Rivers and extends
to the confluence of the Vaal and the Mooi Rivers. The catchment of the area being
55 565 km2. This area includes the dams like the Vaal, Grootdraai and the Sterkfontein.
The area includes areas of the Free State, Mpumalanga, Gauteng and the North West
Provinces;
• Middle Vaal-the area below the confluence of the Vaal and the Rietsrpuit Rivers but
upstream of the Bloemhof Dam. The area includes the headwaters of the Schoonspruit
River in the north and the Vet River in the south and covers an area of 52 563 km2; and
• Lower Vaal-the area that falls below the Bloemhof Dam and the confluence of the Vaal
and the Orange Rivers at Douglas in the Northern Cape.
The submission of this Business Case for the Establishment of the Vaal River CMA to the
Minister is the next stage in the process, and will be promulgated by the Minister in a
Government Gazette in terms of Chapter 7 of the National Water Act, Act 36 of 1998.
The Minister must, in accordance with section 78(3) publish a notice the in the Government
Gazette for a period of no less than 60 days inviting comment on the establishment of the
CMA. Once the Minister has received all the comments, and has considered these for the
various implications, the Minister may establish the Vaal River CMA.
6.4 Corporate Form
The 2012 Department of Water Affairs document “A Framework to guide the establishment
of Catchment Management Agencies” provides the following conclusion on the selection of
Corporate form for CMA’s. This is considered to remain relevant to the CMA:
“According to the National Treasury, the public entity corporate form is suitable for functions
that require the involvement of stakeholders and experts to ensure effective and efficient
delivery and where a moderate degree of autonomy in decision-making is desirable, or
functions where it is necessary to assign decision-making to an independent juristic person in
order to enhance public confidence in the implementation of a policy framework or the
provision of policy advice or research. A business enterprise, on the other hand, is primarily
focused on the provision of goods and services in a market environment.
32
There are four key reasons why creation of a public entity is preferred for the CMA:
•
It is a model that has already been implemented in the Breede-Overberg WMA and the
Inkomati WMA, with benefits already being seen despite the lack of transfer of functions
to these CMAs and their financial constraints;
• A CMA is a service-delivery entity performing a function of government ;
• A CMA does not directly provide goods and services in a market environment but it is
dependent on revenue from water users for the delivery of the services; and
• A CMA needs to involve stakeholders in the management of water resources and to
build public confidence in its implementation of water resources policy.
It is therefore proposed that each CMA be established as a national public entity and listed
under Schedule 3 (a) of the PFMA because it:
•
•
•
•
would be established in terms of National legislation;
may be partially funded from the National Revenue Fund;
would be accountable to Parliament; and
would not be authorized to carry out a business activity providing goods and services in
a market environment. “
33
7. Functions of the CMA
7.1 Introduction
The functions that the Vaal River CMA will perform are informed by the National Water Act,
as described below.
The functions to be performed by a CMA fall into three categories:
• Initial functions as described under the National Water Act (S80);
• Inherent functions conferred on a CMA under the National Water Act; and
• Other functions that may be delegated or assigned to the CMA by the Minister.
This chapter aims to describe the following: delegation versus assignment, delegation of
functions by the DWS, the phased transfer of these functions, considerations for the
delegation process, and implications for the structure and functions of the DWS.
7.2 Delegation vs. Assignment
As stated in the National Water Act, the Minister holds the authority to delegate or assign
functions to the CMA, and it is therefore important to distinguish between delegation of
functions, and assignment of functions.
When a power or duty is delegated, the CMA is effectively carrying it out on behalf of the
Minister and delegation may be withdrawn or made conditional. When a power or duty is
assigned, the power or duty is fully transferred to the CMA, which exercises the power or
duty in its own right. The policy position underpinning this functional analysis is that CMAs
will, in due course, perform most of water resources management functions, and that the
Department of Water and Sanitation (DWS) will only retain those strategic and national
level functions. Thus, in determining whether a function should be delegated to a CMA, the
following issues are considered:
•
•
•
•
The spatial scale at which the function must be performed, in particular national or
regional multi-water management area functions should not be delegated, while WMA
or local functions should be delegated;
The significance of the potential impact of the function;
The capacity to perform the function, which would include a plan to build that capacity
for the delegation, rather than the need to demonstrate existing capacity; and
The principle that a water management institution cannot regulate or audit itself.
Current policy on the delegation or assignment of tasks is that until the CMA’s institutional
arrangements have matured and been tested, functions and powers should only be
delegated to the CMA’s rather than formally assigned. This provides a “safety net” allowing
the Minister to withdraw functions if they are not being performed effectively.
34
In addition conditions can be attached to any specific delegation or assignment of a
function. In the delegation of functions to the existing Inkomati and Breede Overberg CMA’s
the conditions outlined below have been applied and it is reasonable to assume that similar
conditions will be applied to the Vaal River CMA.
(a)
(b)
(c)
(d)
Access to the WARMS and any other system that might be required to support the
functions hereunder and can readily interface with the Department’s systems;
A protocol/an action plan to coordinate water user’s activities and foster
cooperation between institutions;
Job descriptions of positions, that will be implementing the process contained in this
delegation, are in place; and
CMA, must:
(i)
submit quarterly reports to the Chief Director: Institutional Oversight and
Regional Head; and
(ii)
report any change in the capacity and skills referred to in condition(a).
7.3 Delegation of functions
The following functions to be performed by the CMA have been identified:
•
•
•
•
•
Develop Policy and Strategy;
Regulate Water Use;
Establish, Support and Regulate Institutions;
Monitoring and Planning; and
Infrastructure development.
A brief summary of what each function entails is provided below, and an indication to
whether each item listed under these function is retained by the DWS, or assigned or
delegated to the CMA (See Table 6 below). In addition to the functions listed below, the
Quality/Compliance management with its internal functions; and Management of Assets
and Facilities, are Internal Functions which should be assigned to the CMA.
Develop Policy & Strategy
National Policy and Strategy; Legislation and WRM Methods; National Water Resources
Strategies; Pricing Strategies; Institutional Roles and Responsibilities; and Determination of
Water Resource Classes, should be retained by the DWS.
The development of policies and strategies is a function that should largely be retained by
the DWS, although the CMA will provide input. As the DWS will retain most functions in
terms of development of policy and strategy, it is recommended that only the development
of policy and strategy relating to the Determination of Reserves and RQOs of non-National
Significance be delegated.
35
Furthermore, the development of policy and strategy of Catchment Management Strategies
and the Financial Management and Planning for CMAs should be assigned.
Regulate Water Use
Authorisation and Allocation of Water for Strategic Purposes; Inter WMA Transfers;
Maintain WARMS Database at a National level; and Regulation of water use where CMA is
the User should be retained by the DWS.
Furthermore, Authorisation of Water Use; Validation and Verification; Enforcement of
Water Use; Setting Water Tariffs; and Collecting Fees, should be assigned.
Establish, Support and Regulate Institutions
Establishment, Support and Regulation of the Catchment Management Agencies; WUAs
who Manage a Works or Have Government Loans; National Bodies (e.g. TCTA/WRC); and
Inter-WMA coordination and Conflict Resolution should be retained by the DWS.
Furthermore, Water Management Institutions specified within the CMS; Coordination of
water related activities of institutions; and Ensuring Public Engagement in WRM and WMA,
should be assigned.
Monitoring and planning
Monitoring and planning of National information and monitoring systems; Monitoring of
Water Resources in National Monitoring Systems; and National Planning (including
Determination of Allocable Water per WMA), should be retained by the DWS.
Additional monitoring required for CMS implementation; Assessment and evaluation on this
monitoring; Allocation within WMA; Water Resource Rehabilitation; Flood warnings within
WMA; Flood Warnings across WMA boundaries; and Drought Rules, should be assigned to
the CMA.
Physical monitoring of national system; and Reconciliation within WMA (in coordination
with national activities) should be delegated to the CMA.
Infrastructure
Major infrastructure development; and Dam Safety and Regulation should be retained by
the DWS, however Localised infrastructure for CMA benefits (e.g. monitoring of equipment)
should be assigned to the CMA.
36
Table 6 : Functions to be Retained, Assigned or Delegated by the DWS
Development of Policy and Strategy
National Policy and Strategy
Financial Management and Planning for CMA
Legislation and WRM Methods
National Water Resources Strategy
Pricing Strategies
Institutional Roles and Responsibilities
Determine Water Resource Class
Determine Reserve and RQO's of Resources of National
Significance
Determine Reserves and RQOs of non-National Significance
Regulation of Water Use
Authorisation of Water Use
Validation and Verification
Enforcement of Water Use
Setting Water Tariffs
Collecting Fees
Authorisation and Allocation of Water for Strategic Purposes
Inter WMA Transfers
Maintain WARMS Database at a National level
Regulation where CMA is the User
Establish, Support and Regulate Institutions
CMA
WUAs who Manage a Works or Have Government Loans
National Bodies (e.g. TCTA/WRC)
Inter WMA Coordination and Conflict Resolution
Water Management Institutions Specified within the CMS
Coordinate Water Related Activities of Institutions
Ensure Public Engagement in WRM and WMA
Monitoring and Planning
National Information and Monitoring Systems
Monitoring of Water Resources in National Monitoring System
Physical Monitoring of National System
Additional Monitoring Required for CMS Implementation
Assessment and Evaluation on this Monitoring
National Planning (including determination of allocable water per
WMA)
Allocation within WMA
Retained
by DWS
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Assigned
or
Delegated
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
37
Retained
by DWS
Reconciliation within WMA (in coordination with National
activities)
Water Resource Rehabilitation
Flood Warnings within WMA
Flood Warnings across WMA Boundaries
Drought Rules
Infrastructure
Major Infrastructure Development
Localised Infrastructure for CMA Benefit (e.g. monitoring
equipment)
Dam Safety and Regulation
Other Internal Functions
Quality/ Compliance Management with its Internal Functions
Management of Assets and Facilities
Assigned
or
Delegated
X
X
X
X
X
X
X
X
X
X
38
8. Organisational Arrangements
The Vaal River CMA functional structure must provide a systematic response to the water
resource management challenges listed above. A possible high level functional organisation
of the Vaal River CMA consists of functional areas captured in Figure 8.1 below and briefly
described in the subsequent sections.
Figure 8.1 : High level proposed Vaal River CMA functional structure.
8.1 Overall Rationale
Perhaps the greatest institutional challenge posed by the creation of the CMA is the tension
between local service provision and consistent direction and leadership which tends
towards centralised management.
The proposed organisation structure operates across three tiers. At the most central level a
leadership tier is envisaged which contains both the CMA board providing strategic direction
from the perspective of appropriate stakeholders and the CEO’s office to provide
governance and leadership at an operational level.
39
The next tier has a strong operational focus, both technically and administratively,
comprising teams which have clear technical or administrative capacity to deliver services
and limited need for specific local presence. Where these tasks are technical, a centralised
team can provide the necessary critical mass for the team to function efficiently.
The final tier is at the local level in “district offices” where tasks will be performed which
require a physical presence in closer proximity to the users and local stakeholders. These
will need local leadership but will also need direct interaction with the technical teams in
the middle tier to ensure technical performance.
The structure proposed envisages the CMA operating from three physical centres. The CMA
“Head Office” is expected to reside in the Upper Vaal, with district offices in each of the
Middle and Lower Vaal areas. It is envisaged that an “Upper Vaal” field team will also exist in
the same office, but as a separate entity from the Head office staff. The precise office
locations are to be determined by the Vaal River CMA board once established although a
number of parameters for its location are defined in section 9.3.
8.2 Leadership
Part 2 of Chapter 7 of the National Water Act defines the requirement to appoint members
a governing board of the catchment management agency. The board is required to
represent the interests of the various stakeholders in a balanced manner, and the necessary
expertise to operate effectively is provided.
Supporting the board will be an executive body of employees (rather than elected
members) who will support the board in the operational management of the CMA.
8.3
8.3.1
Technical Expertise
Water Use Catchment Regulation
The Water Use Catchment Regulation unit is responsible for coordinating and managing all
regulatory functions of the CMA. This will include water use authorisation, which includes
water allocation reform, as well other regulatory functions of water quality management
such as compliance monitoring and enforcement. The compliance monitoring will be
undertaken at district level by “compliance inspectors” (who may also fulfil other task
functions)
The water resource management programme includes activities such as licensing,
registration of water users, monitoring of water use, management of information and
records on water use, including ensuring water use compliance and enforcement for the
prescribed water uses. Water use management and related responsibilities such as
compliance and regulation, including related functions such as validation and verification of
water use to support the water resource management planning function is the focus of this
water use catchment regulation function. The water quality management priorities include
40
the registration of waste and developing measures for effective resource protection and
compliance with regulations and license requirements.
The water use catchment regulation function complements WARMS by providing
information on water use which may again need to be fed from the district offices.
While the CMA will initially focus on making recommendations to DWS regarding water use
authorisations, promoting and implementing demand management interventions and
issuing directives and restrictions on water use during emergencies, ultimately it will take
over the licensing function, including compulsory licensing. Inspections to verify information
contained in license and registration applications are performed in this division of the CMA,
including registration, issuing of registration certificates and water use de-registrations. This
is likely to happen at a central level with field monitoring and assessment undertaken by
“inspectors” within the district offices.
8.3.2
Institutional and Stakeholder Coordination
While institution and stakeholder involvement will be coordinated across the whole of the
Vaal River CMA area, it is proposed that the institutional and stakeholder interaction should
be carried out on an area basis, specific to the three sub-catchments of the Vaal, and will
focus on:
•
establishing and fostering relationships and credibility within the water management
area;
• establishing, overseeing and providing support to water user associations, (except those
that manage government waterworks or have government guaranteed loans);
• ensuring co-ordination between water management institutions and relevant
government departments and organs of state in the water management area; and
• establishing and maintaining stakeholder consultation forums and mechanisms, with a
particular focus on ensuring the participation of poor and marginalised communities.
It is envisaged that the engagement team will be kept to a minimum and will focus on
ensuring effective engagement with the technical members of the CMA. The team must be
facilitators and not an obstacle for Stakeholders to access the technical expertise of the
Catchment Management.
In the new Vaal River CMA, the initial focus should be on coordination and mobilisation of
stakeholders, including building legitimacy, trust and strategic relationships with key partner
institutions, including establishing and supporting consultative bodies such as stakeholder
forums. This institutional coordination function complements the information management
function through effective stakeholder engagement to ensure that the CMA is marketed to
water users.
Typically, good relations and close cooperation with large, well established and strong
organisations such as Rand Water, Sedibeng Water and Midvaal Water Company need to be
41
encouraged and fostered. These organisations play a vital role in water supply in the
catchment and undertake valuable monitoring activities within their areas of jurisdiction
and also have meaningful, on the ground interaction with forums in the catchment. With
the aim of the CMA to interact at grass-roots level, it is imperative that these organisations
are invited to play a significant role in support of the CMA.
Ultimately there is potential for cost saving (within both the proposed CMA and potentially
partner organisations by removing any duplicated effort and ensuring that knowledge and
data are shared across institutions.
A range of potential models are considered for engagement with other organisations in the
WMA and these are summarised below.
42
Table 7: Possible collaboration models with partner agencies.
Model
Description
Benefits
Limitations
Potential Opportunities
Statutory
Engagement as
Stakeholder
At the most limited level stakeholders
will be engaged within forums or
through engagement process on
specific documents/activities such as
the Catchment Management Strategy
Ensures formal engagement and
maintains independence between
institutions. This is vital where there
are potentially conflicting issues
between regulators and users.
Difficult to maintain continuity
particularly if engagement is
sporadic.
This model can be used in most
elements of the operation of the
CMA.
Informal
coordination/data
sharing
Beyond the statutory minimum,
professional working relationships
between organisations to ensure
information is shared effectively.
Limited effort, many such
relationships exist already.
Informal arrangements make it hard
to determine if specific value is being
had (i.e. is any money being saved).
May be appropriate to occasional
uses such as the development of the
where information is relevant but not
in use on a day to day basis. May
also be of use in enforcement action.
Formalised
coordination/data
sharing
MoU’s agreeing responsibilities to
collect information and subsequent
“rights” to go out and collect data.
Shared systems could make for
efficient and well controlled data
management.
Clear lines of responsibility.
Question over ability for one party to
rely on the other’s information (are
there liabilities transferred?)
More appropriate if there is a need
on a day to day basis, such as
quality or quantity data. May also be
of use in terms of managing
customer accounts and enforcement
monitoring.
There are organisations within the
catchment who have existing skills
which may be usefully transferred to
the CMA.
Lower cost than recruitment and may
be a useful tool in “upskilling” former
DWS staff in new areas of operation.
Increases stakeholder interaction
across what could be considered
“partner” organisations.
Can only be applied where there is
an overlap in skills/need (e.g.
monitoring or credit management).
Where identified skills are weak in
the proto-cma but are available
elsewhere (for example in new
functions or functions which have
not been effectively performed in the
past). Could apply across a range of
functions.
Competent service provider with
performance requirements to ensure
delivery of service.
Against the principle of a selfsufficient technical agency.
Occasionally performed tasks or
tasks that require specific equipment
or skills which are not within the
CMA. An example would be
laboratory testing.
Mentoring from
outside agency
Formal mentoring agreements could
be a productive way to improve
efficiency in the CMA at minimal cost.
Outsourcing
Entirely outsourcing a function or
component of a function.
Accountability of provider to user.
Should be considered in the context
of current operations (i.e. who is
actually delivering data).
Engagement is a fixed points in time.
Makes it difficult to influence overall
direction of travel.
May be questions over
independence of data colloection
Additional costs associated with
procurement and management of
contracts.
Does not build capacity in the
agency.
43
8.3.3
Water Information Management
Given the three sub-catchments of the WMA, the different water availability and
requirement needs, the integration of information management systems is crucial.
Integration of information and the relevant management system is the responsibility of this
division. Data and information acquisition, management and sharing/dissemination are key
to fulfilling the role of the Vaal River CMA. The information management functional area
will focus on providing comprehensive and consistent information at all levels, set-up
effective information systems, including establishing strategic interfaces with DWS
information systems where necessary to improve access to information by stakeholders.
The key aspects of this function are set out below:
Monitoring systems: the CMA must put in place the necessary monitoring of water use
and resource status that they need to perform their functions, over and above the
national monitoring conducted by DWS;
• Data and information systems: the CMA must put in place the necessary databases and
information systems to capture the relevant data to be provided by DWS from the
national information system and from their own monitoring systems. These must cover
water use (registration and authorisation), and resource status (water quality and
quantity). These systems must interface effectively with the DWS systems and with
other related CMA systems. DWS will need to put in place appropriate protocols to
ensure that this is possible.
• Information assessment: The CMA must be in a position to analyse the information to
provide trends and evaluation assessment to the planning and management sections so
that they are able to respond appropriately to ensuring effective use and management
of water resources.
• Disaster management: Provide the systems and data required to implement crisis plans
developed by the Catchment Strategy function and ensure early warning for disaster
events.
The information manager must be an integrator, facilitating the integration of water
resource information to corporate and strategic information systems, in particular keeping
up to date information on registrations and water use to support revenue collection and
strategic planning process at WMA and National level.
•
8.3.4
Catchment Strategy Programmes and Planning
Catchment Strategy, Programmes and planning is responsible for planning the development,
allocation of water resources (including water quality aspects) to meet resource quality
objectives (RQO), and to reconcile supply and demand, including the operation of water
resources infrastructure. This division will be responsible for performing the following
functions:
44
•
•
•
•
•
Conducting and commissioning water resources studies and investigations on water
resources, advising DWS and interested parties on the matter and supporting integrated
water resources planning through the following:
o Coordinating the development of a catchment management strategy (CMS)
in accordance with the national water resources strategy. This function
includes:
o Conducting, commissioning and participating in investigations and studies to
gather information to support management decisions for strategy
development;
o Developing management strategies, including WRM/ reconciliation,
allocation and water quality management plans;
o Investigating and providing advice to DWS on WMA planning to inform the
NWRS and other national processes; and
o Advising users/institutions on implications of CMS/ NWRS for water resource
development.
Investigating and providing advice on disaster management to DWS and other
institutions on the management of floods, droughts and pollution incidents, putting in
place early warning systems and supporting municipalities in preventing development
within floodplains;
Classification of water resources and reserve determination
Planning for allocation of resources; and
Resource Protection including determination of reserves and development of resource
quality objectives, managing the river health programme, and protecting the state of
water resources, including monitoring and controlling pollution by water users’ control.
8.3.5
Corporate Services, Finance and Support
The corporate service, finance and support functional area will be responsible for collection
and administration of water resource management charges, corporate financial
management, corporate strategic planning, human resource management, and general
administration of the organisation. Some of its key areas of focus include:
•
•
•
Billing, revenue collection and management: focusing primarily on the billing and
collection of water resource management charges, and the administration of all
activities related to revenue collection, including issuing of invoices and managing debt
associated with non-payment, including managing transfer of revenue collection from
DWS.
Finance: to ensure general financial sustainability and viability of the CMA through
effective financial planning and budgeting and management of accounts for the CMA,
including ensuring that financial controls and reporting systems are in place.
Administration: to manage and ensure effective office administration and general
logistic / office support is in place, including effective records management
45
Human resource management: The human resource development and performance
management will be oriented towards the broader human capital management and to
ensure employee well-being through processes such as:
o Development and implementation of human resource systems and policies
o Recruitment and retention of staff
o Managing staff performance
o Managing the internal Vaal River CMA change management and
transformation process
o Employee assistance programmes
o Managing employee occupational safety
o Awareness and capacity building programmes
o Coordinated training and skills development interventions
This function integrates the operations of the core functional elements of the CMA through
effective coordination and management of administration and support requirements.
•
8.4 District Engagement
Three “district” units will be established to provide local services. This is anticipated to be
largely associated with the field based verification and monitoring of water use within the
catchment.
The primary function of the district offices will be to provide local platforms for site based
work such as monitoring of compliance for enforcement purposes and verification and
validation of water use.
They will provide data to the technical teams in head office through the collection of hard
data, and entry of this data in the WARMS system. However they will also be instrumental in
engaging with stakeholders at the most local level to understand the challenges of water
users in their respective areas.
The current proposal is for the inspectors within the district offices to report via the Water
Use and Catchment Regulation function.
46
9. Organisational requirements
The Vaal River CMA will require five executive management positions consisting of
Executive Managers for Water Use and Catchment Regulation, Institutional & Stakeholder
Coordination, Water Information Management, Catchment Strategy, Programmes &
Planning, and Corporate Services and Finance. The CMA team is led by the CEO. The
company secretary located in the office of the CEO will provide legal services expertise to
the Vaal River CMA.
In consultation with the regional offices, the required number of staff for the three district
offices is based upon the specific water resource challenges at hand. This has been
determined through an ongoing internal process put in place to establish Proto-CMAs. Since
the role of the district offices will be predominantly compliance monitoring, the numbers of
inspectors is linked to the size and complexity of the sub-catchments.
It is estimated that the Vaal River CMA will require a staff complement of 143 staff across
the various line functions. The sections that follow provide further detail regarding the
reporting and organisational arrangements that are proposed in each functional division of
the Vaal River Section 8.4 briefly discusses remuneration, performance management,
conditions of employment, human resource management systems and policies that the
CMA management needs to take into consideration.
9.1 Staffing Model
Staff have been identified with the existing Gauteng, Free State and Northern Cape Regional
units of DWS as necessary for the execution of functions which will ultimately become the
responsibility of the CMA. This includes both current staff but also vacant positions which
are funded and pending recruitment processes. The nominated staff members have been
indicatively allocated to the functional units described in Chapter 8 of this document. It is
not the intention of the business case to resolve transfer of individual staff to specific roles
and therefore the allocations of staff should be considered indicative.
An independent assessment of potential roles and responsibilities was also undertaken by
the Professional Service Provider appointed to support the development of this business
case. This is presented in Appendix 2 for reference. While this provides a useful alternative
view, the Proto-CMA model has been selected as the basis for this business case as it more
accurately reflects current budgeted expenditure.
Ultimately the direction in which the CMA board takes the structure and makeup of the
organisation is a matter for the CMA board and will need to reflect the needs of the agency
over time as it evolves and its ability to generate or source the appropriate revenues to
maintain a viable institution.
Table 8 : Anticipated Staff Complement and Staff Costing
47
Functional Unit
CEO's Office
Staff Description
Corporate Services
Average
Salary
Total Cost
Chief Administration Clerk
1
320 067
320 067
Chief Director
1
1 304 289
1 304 289
Artisan (Production) Grade A
1
296 006
296 006
Chief Artisan Grade A
1
495 879
495 879
Chief Water Control Officer
6
314 318
1 885 909
Control Engineering Technician
1
13 842
13 842
Control Environmental Office grade A
1
942 266
942 266
Control Environmental Officer Grade A-C
1
610 582
610 582
Engineer Production Grade A
1
722 734
722 734
Engineering Technician
3
325 914
977 743
Groundsman
2
141 268
282 536
Industrial Technician
2
204 572
409 145
Scientist Production Grade B
1
718 364
718 364
Senior General Foreman
4
209 893
839 573
Water Control Aid
6
225 061
1 350 369
Environmental Officer Control Grade A
1
522 550
522 550
Environmental Officer Specialised Production
4
479 688
1 918 751
Environmental Specialised Production Grade A-C
1
368 237
368 237
Environmental Officer Production Grade A-C
4
320 337
1 281 347
Environmental Officer Grade A
2
272 276
544 553
Principal Auxiliary Services Officer
1
220 332
220 332
Administration Clerk
1
148 227
148 227
Assistant Director
1
355 685
355 685
Control Environmental Technician Grade A-B: Civil
1
771 841
771 841
Water Control Officer
2
370 407
740 813
Tradesman Aid
1
168 175
168 175
Senior Water Control Officer
Catchment Strategy Programmes
and Planning
No.
Staff
10
243 062
2 430 616
Chief Auxiliary Services Officer
1
264 432
264 432
Scientist Candidate
1
374 801
374 801
Scientist Production Grade A
2
562 129
1 124 257
Senior Administration Clerk
4
182 753
731 013
Senior Administration Officer
1
190 249
190 249
1
385 976
385 976
1
420 193
420 193
Accounting Clerk
2
227 892
455 784
Administration Officer
1
397 025
397 025
1
300 308
300 308
Cleaner
2
148 873
297 747
Deputy Director Administration
1
583 093
583 093
Engineering Technician
4
305 407
1 221 629
General Worker
2
140 544
281 089
GW:Labourer
5
151 493
757 463
Scientist
1
582 199
582 199
Senior Auxiliary Officer
3
244 240
732 720
Senior General Foreman
1
188 872
188 872
Senior State Accountant
2
352 835
705 669
State Accountant
4
280 282
1 121 130
Stores Assistant
1
149 827
149 827
48
Institution & Stakeholder
Coordination
6
226 720
1 360 322
Environmental Officer Grade B
1
754 019
754 019
Senior Provisioning Administration Officer
2
273 131
546 262
Senior Accounting Clerk
2
213 100
426 201
Senior Provisioning Administration Clerk
4
262 093
1 048 370
Messenger
1
168 175
168 175
2
298 589
597 178
Community Development Officer
2
223 984
447 968
Control Environmental Officer
3
809 349
2 428 046
Participation Officer
1
285 526
285 526
Scientist Production Grade B
1
503 286
503 286
9
204 526
1 840 737
Senior Administration Officer
1
381 640
381 640
Director
1
Control Scientific Technician
1
417 184
417 184
Environmental Specialised Production
2
515 537
1 031 075
Environmental Specialised Production Grade A-B
1
584 182
584 182
3
461 138
1 383 414
3
465 572
1 396 715
Environmental Officer Grade A
2
272 276
544 553
Administration Clerk
1
146 798
146 798
Senior Water Control Officer
2
262 497
153
524 994
48 722 553
Source: Based on budgets for Upper, Middle and Lower Vaal Proto CMA’s provided by DWS finance at a national level.
Notes:
Two errors were noted in the base dataset which are as follows: i) there is a discrepancy of around R600,000 between total
staff salaries (as above) and the summary cost of employment. ii) One role (director for institutional affairs is being paid a salary
of R0 which is unlikely.
9.2
9.2.1
Summary of Staffing Requirements
Office of the CEO
Implementation of the strategy and business plan of the Vaal River CMA will be driven by an
executive management team directed by the Board and lead by the CEO. The Office of the
CEO is the strategy hub – providing strategic guidance, and shaping the direction that the
CMA must take.
The Board will play a dual role. The first role is that of providing strategic policy support,
including managing and coordinating activities of the board, and keeping records to ensure
that the Board performs its functions effectively. It is noted that a second senior role
providing legal support to the executive management team of the CMA and managing the
legal affairs of the organisation is likely to be required. This is not currently budgeted by the
department.
The board will meet 4 to 6 times a year to discuss and finalise these various strategic
decisions.
49
9.2.2
A technical team with industrial water use, legal /enforcement and environmental acumen
will provide operational support to the executive manager. The executive must preferably
be a qualified engineer or water resource manager with significant experience, supported
by water management specialists / assistant managers that have a Bachelor’s degree/
diploma from an accredited technical college or university with major work in chemistry,
biology, environmental sciences, urban planning, public administration or related fields, and
two years of administrative experience related to integrated water management and
understanding of the regulatory environment is recommended.
9.2.3
This functional unit is the critical link between all divisions of the CMA and the stakeholders,
vital for developing trust, building legitimacy and publicising the institution as a champion
for water resource management in the WMA. The incumbents must have a deeper
understanding of the impact of institutions on water resource management in the WMA.
The team will focus on developing the strategy for engaging with stakeholders both
centrally and within the field, liaison should also be conducted at a local level in all district
offices. . It is also important to recognise that this team’s role is to facilitate engagement,
but that leadership of specific engagement is best owned by the relevant technical or
geographical department.
9.2.4
This is a highly specialised functional unit with technical expertise in GIS and the operation
of the WARMS system. The team will need to allocate officers responsible for managing the
WARMS database, while staff with specific hydrological backgrounds will be required to
manage the hydrological information derived from each of the district offices where it is
captured. It is envisaged that the information management until will rely on strategic
relationships with DWS and private institutions to implement its mandate (see 8.3.2).
9.2.5
Catchment Strategy Programmes and Planning
The Executive Manager for Strategy Programmes and Planning will lead the water resources
planning and programmes division of the CMA. The team will require specialist knowledge
of integrated water resources planning, coordination and management. It is envisaged that
the Water Resources Planning sub-division will rely on strategic relationships with other
public and private institutions to implement its mandate. A close working relationship with
the DWS planning units will be essential.
This component of the Vaal River CMA must have a balance of technical and administrative
support staff. The leader of this functional unit must understand the role of water in socioeconomic development and poverty alleviation, including understanding the significance of
IWRM in the WMA.
50
9.2.6
Corporate Support and Finance
The Corporate Services component is a support function of the CMA. Its management and
staff complement is led by an executive manager who is a Chief Financial Officer. The team
will be responsible for administering the collection and management of water use charges,
and will be allocated sufficient administrative support staff. The unit will also supervise
general support personnel such as (drivers, cleaners, groundsmen, etc.), and functions such
as procurement and marketing.
The management systems of the key components of this division such as the Revenue
Management, Procurement, Administration and HR will be located at head office (Vaal
Office). However, to ensure administrative efficiency, auxiliary services are likely to be
distributed to the two district offices (Middle and Lower Vaal) which will include an Office
Manager, IT Support, Secretarial/receptionists and clerks to support with the administration
of local duties.
The Chief Financial Officer has the responsibility to manage and administer the general
finances of the CMA. Organisational development, staffing and general human capital
management will be the responsibility of the human resources (HR) practitioner. These
management posts are graded at a similar grade level, with possible variations depending
on the number of positions directly reporting to each post.
9.3 District Offices
Details of the distribution of the above staff to the sub-catchment offices will need to be
determined by the CMA itself and there may be HR implications should the need for roles
within the regions not match with the current staff complement. However as a broad
indicator of the level of distribution of staff, current staff complements in the Upper, Middle
and Lower Vaal proto-CMA’s are as follows:
Head office/Upper Vaal
Middle Vaal
Lower Vaal
114
9
30
At a Regional Steering Committee meeting held in Bloemfontein on 7 November 2014 the
following office locations were proposed for consideration.:
•
•
•
•
•
Head Office in Johannesburg
Upper Vaal Catchment Operational Unit at Head Office
Lower Vaal Catchment Operational Unit in Kimberley
Mid Vaal Catchment Operational Unit - Potchefstroom or Klerksdorp or Welkom
May be other staff dotted around if that suits operational purposes.
These offices will be heavily focused on the effective monitoring of both the regulatory
compliance and water use management across the 3 sub-catchments. A comprehensive
51
knowledge of water laws and regulations pertaining to surface water resource
development, administration and management is critical within each office.
As referred to in section local catchment level stakeholder engagement expertise may also
be necessary.
9.4 Human resource considerations
The CMA has not yet been functional; hence, this means that most of the powers and
functions earmarked for assignment to the CMA remain in DWS Regional Offices (ProtoCMA). A gradual process of transferring powers and functions to the new Vaal CMA should
be initiated as soon as the WMA is promulgated and gazetted. Such a process will however,
directly impact on staff currently employed by the Proto-CMA performing water resource
related functions. This section discusses some of the key considerations that relate to staff
transfer, including remuneration, performance management, systems and policies
necessary for effective human capital management.
9.4.1
Grading and remuneration
The topic on remuneration of staff is a vexed one as it affects the organisation’s capacity to
attract and build its internal capacity, and staff motivation. As such, the Vaal River CMA will
be a technical institution, with a requirement to enable government meet its national
obligations while also building a reputable international presence through acceptable IWRM
practices. This means that it will depend largely on the availability of high level technical and
coordination skills to perform its functions effectively. Such technical skills are required for
both strategic and operational management. With these issues in mind, three remuneration
models are proposed; one for the Board which is based on recovery of expenses rather than
a specific salary, another for technical staff which is based on Occupation Specific
Dispensation rates (OSD), and non-technical staff of the CMA who’s salaries have been
aligned with Department of Public Service and Administration “Salaries and Benefits in the
Public Service”. The salary of the Chief Executive Officer will be benchmarked against the
DPSA’s “Chief Director” salary level.
9.4.2
Transfer of staff
Section 197 of the Labour Relations Act (LRA) allows for staff to be transferred as part of “a
going concern” to another organisation provided that the conditions of service are
“substantively the same”. As a result, it is proposed that consultation with affected staff
take place to ensure that the conditions of employment are at least as good as that which
they enjoyed as DWS employees. Where appropriate, staff could be seconded to the CMA
within parameters as envisaged in the Labour Relations Act 66 of 1995 (as amended) (LRA).
Seconded staff will then be transferred from the Regional Office to the CMA in line with the
requirements of Section 197 as mentioned above. Consultation with affected parties is
critical and it must be ensured, and where possible written agreements may be put in place,
and salaries and conditions of employment need not be less than those applicable currently.
52
It is not the objective of this report to determine the impact of the transition to a catchment
management agency for individual staff members and this study has not examined staff on
an individual basis within existing DWS structures to new roles within the proposed CMA.
However negotiations are ongoing and an agreement for the transfer of staff from the
existing department to the proposed CMA is currently under discussion. At this stage, and
subject to the conclusion of those negotiations, a likely transfer mechanism appears to be a
section 197 transfer under the Labour Relations Act (see 9.4.2). This is consistent with the
staff numbers presented in Section 9.1.
9.4.3
Performance Management
Performance management is a two way process integrating both the organisation and the
individual. This is based on the understanding that the success of both the individual and the
organisation are interdependent. However, it is not the scope of this document to suggest a
specific approach to performance management by the CMA. That responsibility is vested in
the board.
9.4.4
Organisational systems
From a water resource management point of view, information management systems are
critical. Since the CMA will be required to collect and manage revenue to ensure its
sustainability, a standardised revenue management system is desirable. This should be
coupled with water resource management systems to capture and management of data.
Key among these are:
•
•
•
•
•
•
Geographical Information Systems;
Hydrological Information Systems;
A standardised billing system;
WARMS;
Waste Discharge Charge System; and
General administrative systems for finance and HR.
9.4.5
Organisational policies
It is important to ensure marketability and stability from the early stage of CMA
establishment. From a human capital management perspective organisational policies are
critical. A table of contents for a typical set of policies would include sections on:
•
•
•
•
•
•
•
Employment practices;
Performance management;
Salary administration;
Leave;
Employee benefits;
Labour relations;
Discipline and rules; and
53
• Training and development.
The DWS is currently developing a “Starter Pack” that will provide a range of pro-forma
policies and tools that CMAs can use as the basis for their own policy and systems
development. Human resource aspects of this starter pack have been identified as critical,
together with the financial aspects.
9.4.6
Physical Location of Staff
While the precise location of offices for the department is yet to be resolved, some key
principles for the establishment of offices have been outlined.
•
•
•
The CMA’s offices must be within the WMA itself;
There will be a head office and two supporting offices; and
The final locations of the offices will be established by the Department of Water and
Sanitation, and not by the CMA board.
54
10.Financial Arrangements
Whilst there are many factors that will determine the feasibility of the establishment of a
CMA, and indeed any organisation, Financial Viability is arguably one of the most important
aspects in determining the feasibility of the establishment of a CMA. The other aspects
discussed in this report are vitally important and can be implemented over time if the
financial viability is sound. The Financial arrangements, among others, will be key to the
institutional development process and will remain integral to the longer term success of the
CMA. Catchment Management Agencies (CMA) have no tested predecessors and will have
to be established and evolve in a complex and changing business, social and natural
environment. In such an evolving structure, it is important to note that the financial aspects
will need to be adapted to suit the continual development of the new institution as DWS’s
responsibility reduces while that of the CMA increases.
10.1 Source of Finance
10.1.1 Introduction
Section 84 of the National Water Act (NWA) gives the CMA full authority to raise funds for
the purpose of exercising its powers and duties. The Act details the sources of funding for
the CMA as:
•
•
•
Parliamentary appropriation;
Water use charges; and
Other lawful sources, viz:
o recreational concessions;
o license application fees;
o donor support and sponsorship;
o contractual payments;
o investment returns; and
o donations.
Source of Funding
DWS – parliamentary appropriation
WRM Charges – water use charges
Other – licences, grants, donations, etc
Application of Funding
Establishment of CMA
Operations
Capital Repayments
Service Providers
Figure 3: Financial arrangements for the Vaal River CMA
While the intention is that the CMA should be funded from water use charges, some
operational funding from the DWS may be required where subsidy arrangements exist.
55
Water use charges however cannot be used for the establishment of new institutional
arrangements as these funds should be ring-fenced for the purpose for which it is intended,
namely implementation of water resources planning and management in the catchment. It
is believed that the establishment costs of the Vaal River CMA should be funded by the
Department of Water and Sanitation, from its parliamentary appropriation.
10.1.2 Water use charges and the pricing strategy
Once the CMA is operational, funding of the CMA will be derived largely from water users.
Water uses as defined in the NWA can be broadly categorised into Abstraction related uses,
Waste discharge related uses and Non-consumptive uses.
The Act empowers the Minister, in consultation with the Ministry of Finance, and after
consulting with the public, to establish a pricing strategy for any water use described in
section 21. The Act provides for three types of water use charges, namely:
a) Funding water resource management: activities such as information gathering,
monitoring and controlling water resources and their use, water resource protection
(including waste discharge and the protection of the Reserve), and water
conservation.
b) Funding water resource development and use of waterworks: the costs of
investigation, planning, design, construction, operation and maintenance of
waterworks, pre-financing of development, a return on assets, and the costs of
water distribution. (Resource management and resource development charges are
financial charges, which are directly related to the costs of managing water
resources and supplying water from schemes and systems).
The pricing strategy applies only to the use of raw (untreated) water directly from or in
respect of water resources, and to the setting of tariffs by the Department and water
management institutions established in terms of the Act. It does not deal with treated
water supplied in bulk (by water boards, for instance) and distributed to households (via
water services authorities), which is dealt with in the Water Services Act, 1997. There is,
nevertheless, an explicit requirement in the Act to ensure that the pricing strategy supports
the establishment of tariffs for water services in terms of the Water Services Act.
The Pricing Strategy, established under the NWA, will allow DWS/CMA, over time, to levy
charges for most of the water uses defined above, after consultations with the Minister and
the public.
The water uses described in section 21 are sufficiently different to warrant different
approaches to determining charges. The overall pricing strategy will therefore comprise a
number of distinct components - described below - each of which will be established
separately, and implemented progressively over time.
56
10.1.3 Abstraction and Consumptive-related uses
Water use charges are already in place for abstraction related uses and are currently
collected by the DWS.
Charges will apply to three consumptive uses of water which can be expressed in terms of
annual volumes of water used:•
•
•
Abstracting (taking) raw water directly from surface and groundwater resources (section
21(a));
Storing water (section 21(b)). In this case the use is abstracting water from storage or, in
the case of dams constructed to enhance property values or for recreational use, initial
filling and annual refilling [2]; and
Engaging in a stream flow reduction activity (section 21(d)). Thus far only the use of land
for afforestation which has been established for commercial purposes has been declared
to be a stream flow reduction activity. Other land-based activities are being considered,
and may be declared in future in terms of section 36.
10.1.4 Waste Discharge Charge System
The Waste Discharge Strategy will deal with charges for all aspects of waste discharge, as
follows:
•
•
•
•
•
Engaging in a controlled activity (section 21(e), and section 37(1)(a) and (d) also refer);
Discharging waste or water containing waste into a water resource (section 21(f));
Disposing of waste in a manner which may detrimentally impact on a water resource
(section 21(g));
Disposing of water which contains waste from any industrial or power generating
process (section 21(h)); and
Aspects of removing, discharging or disposing of water found underground (section
21(j)).
The system will be based on the “Polluter Pays” principle and will address point and diffuse
sources of pollution. It will supplement the more traditional regulatory approach to water
quality management, in which standards and objectives are set and enforced, by introducing
financial and economic incentives and disincentives to:•
•
•
Ensure that the costs of polluting activities are, as far as possible, borne by the polluter
(internalised), and not passed on (externalised) to other water users who could be
disadvantaged by the detrimental impacts of waste on water resources;
Encourage the minimisation of waste discharge; and
Promote efficient and effective water use.
57
Charges made under the system will reflect the direct and indirect costs associated with the
discharge or disposal of waste. Accordingly, key representative pollutants and the costs for
reducing the impacts of various categories of pollutants will be identified, and methods for
determining the direct costs of impacts will be developed. Revenues from the charges will
be used to fund water quality management activities related to waste discharge or disposal,
such as impact monitoring and mitigation, providing assistance to users to reduce the
impacts of their discharges or disposal activities, and system administration.
10.1.5 Non-consumptive Uses
The Department is considering the introduction of further components of the pricing
strategy for the other aspects of water use, which deal with impeding or diverting flow in a
watercourse (section 21(c)), altering the physical characteristics of a watercourse (section
21(i)), and for the use of water for recreational purposes (section 21(k)). A strategy has also
been developed for charging for recreational use, as a non-consumptive water use,
however, there is some institutional clarity required through DWSs Institutional Reform and
Realignment process as to roles and responsibilities in this regard.
10.1.6 Other components of the pricing strategy
It must also be noted that there are a number of water uses that are not subject to pricing
under the Pricing Strategy, namely:
•
•
•
•
water use under Schedule 1 of the NWA;
basic human needs (Reserve);
ecological sustainability (Reserve); and
International obligations.
10.1.7 Tariff Structure
The current tariffs for the Upper, Middle and Lower Vaal River CMAs are as follows:
Table 9 : Raw Water Charges
Raw Water Charges (c/m3)
Year
2013/14
Sector/ Use
Domestic & Industrial
Irrigation
Forestry
Upper Vaal
2.58
1.88
1.06
Middle Vaal
2.61
1.94
Lower Vaal
1.77
1.43
2014/15
Irrigation
Forestry
2.58
2.00
1.26
2.70
2.00
2.09
1.66
Historically these values have been calculated by examining the potential yield within the
catchment, apportioning proportionate usage to the key sectors within each catchment area
58
and calculating the tariff by broadly dividing the cost to deliver services by the volumes
delivered. This approach has recently been amended to examine licenced usage (derived
from the WARMS database), rather than potential yield. Tariffs are also now harmonised
across the Vaal catchment, rather than being divided in to the Upper, Middle and Lower
WMAs. The proposed tariffs for 2015/16 are presented below.
Table 10 : Proposed Tariffs
Year
Sector/ Use
Tariff
2015/16
Irrigation
Forestry
2.49
1.45
1.27
10.1.8 Financial Support
CMAs are primarily expected to collect revenues from water users to fund its activities.
However in addition to primary regulatory and management obligations administered in the
public interest, CMAs also have a mandate to achieve the government’s political, social and
environmental objectives in ways that may not directly benefit water users. As such it is
acknowledged that there is a requirement for some level of financial support to subsidise
the CMA, ensuring that all of it responsibilities are appropriately discharged. The
Department has identified that there is a case for a Public-Interest Operating Subsidy of up
to 35% of the total operating cost of the CMA (DWA, 2012). However the source document
does not provide a clear indication of how this will be applied. For example if the shortfall in
collections is less than 35% of the total amount, it is not clear if the Public Interest Operating
Subsidy can be used to subsidise tariffs within the CMA or if this is intended as “top up”
funding. Further work and engagement with stakeholders is required to resolve this issue.
Issues of ability-to-pay and willingness-to-pay are anticipated in the WMA in the short-term
and for a young institution these can be challenging to deal with. Initial financial support
may therefore be required to ensure short-term viability until there is adequate cost
recovery. Should there be short term specific funding issues, for example where recovery is
poorer than budget or a specific activity not covered within the CMA’s budget is required, a
specific motivation may be made for ad-hoc interventions from the fiscus to ensure
functional delivery of CMA services. These will be reviewed on a case by case basis.
Although the Vaal River CMA will be legally mandated to perform the function of billing and
collecting of water use charges, assistance from DWS will be required in the short term to
collect water use charges until the institutional and systems arrangements are in place in
the CMA.
It is also important to address allocation reform and redress within the WMA, as a national
and regional priority, and therefore issues of affordability and equity will require careful
consideration.
59
10.2 Flow of capital
Funds will flow into the Vaal River CMA through the following:
•
•
•
Water use charges;
DWS establishment and operational support grants; and
Other legal sources.
10.2.1 Water Use Charges
Water Use charges levied on water users will be the most important source of income for
the CMA. These charges will be levied in accordance with the pricing strategy and approved
tariffs from time to time.
Water use charges will flow into the CMA on a regular basis, with large water users billed
monthly and smaller users billed six-monthly. Debt Management is a serious concern for
business in general and the CMA will be no exception Initially the CMA will be dependent on
DWS for it billing, collections and debt management but this function will be passed on to
the CMA as it develops.
It is expected that the CMA will improve on the collections record of DWS as the CMA will
probably be closer to its customers and will have a more engaging relationship with its
customers than has been with DWS in the past. This will be an important management
challenge for the CMA as Water Use charges remains the primary source of income and
cash-flow for the CMA.
10.2.2 DWS Establishment Grant
The CMA should not be expected to bear the costs of establishment of the CMA. As the
establishment of the Vaal River CMA is a new beginning in terms of being a functional CMA,
it is considered prudent for DWS to provide an establishment grant to cover the upfront
establishment costs of the CMA.
A lump sum establishment grant should be provided by DWS at the pre-establishment phase
to ensure that the CMA will not run into financial problems in terms of funds availability to
implement the establishment of the institution. A lump sum transfer is justified; as the
funds are relatively small but the consequences of not having the funds available timeously
could hamper the establishment process and delay operations of the CMA.
In addition to the initial establishment grant, the CMA may require additional funding to
bridge any deficit that may be expected from water use charges. A realistic budget should
be prepared by the CMA indicating anticipated costs and most likely income from WRM
charges (taking account of possible collections difficulties). Any realistic deficit between the
budgeted costs and income from WRM charges should be supplemented by an operational
grant by DWS to enable the CMA to effectively discharge its responsibilities in the CMA.
60
It is important that these funds are made available to the CMA at the beginning of each
financial period to ensure effective operations of the CMA. Any lack of funding will result in
the failure of the CMA to perform it duties and functions effectively and could possibly
result in the demise of the CMA.
In preparing the budgets for the CMA, allowance also needs to be made for resource
capacity. It is reasonable to expect that the necessary skills and capacity may not be
available at the outset to effectively perform the functions of the CMA. Certain services will
therefore need to be outsourced to appropriate service providers and this may also need to
be funded from the DWS operational grants (to meet potential shortfalls from the WRM
charges income).
10.2.3 Other Sources of Funding
Where the CMA is unable to raise adequate funding from WRM charges and DWS
operational funding, other sources of finance may be identified. This funding is not
expected to be uniform and should really be used for specific initiatives as donations but
these are unlikely to represent long-term sustainable sources of funding
10.2.4 Budgeting per Catchment Area
As discussed above, the CMA business planning will include a 3 year budget. Regions must
subdivide their total budget allocations for the budgeting cycle between catchment areas in
respect of the under mentioned water resource management activities provided for. The
relevant budget figures must include the cost of gathering information, monitoring, public
participation and support, where applicable. Typical expense headings will be:
•
•
•
•
•
•
•
•
•
•
•
•
•
Corporate Services (Finance, Admin, HR, Procurement, Revenue);
Functional Support;
Planning and Implementation of Water Resource Management Strategies;
Institutional & Stakeholder Coordination;
WARMS, GIS, Hydrological data management;
Dam Safety Control;
Water Quality Management & Pollution Control;
Solid Waste Control;
Water Allocation;
Water Use Control;
Strategic projects;
Water Conservation; and
Demand Management.
In addition to the above budgeting, the CMA needs to take cognisance of the specific issues
in the CMA which may require additional funding, for example:
61
•
•
•
•
•
•
•
Unlawful use of water for irrigation purposes (estimated at 175 million m3/annum);
Water Conservation and Demand Management (currently 36 % water losses
estimated) and inability of municipalities to reduce these losses;
Dealing with Acid Mine Drainage or Underground Mine Water Induced Salt-Loading;
Reduction in recharge due to re-use of water from the return flows from the various
Waste Water Treatment Plants;
Water quality challenges from the coal mining industry;
Climate change impacts; and
Free Basic Water – does not need to be accounted for as it is provided for by the
equitable share grants to municipalities.
10.3 Financial Systems Arrangements
Financial system arrangements will consist of the following key aspects:
•
•
•
•
•
•
•
•
Tabling of plans: The Governing Board must approve and submit a strategic plan to the
Minister;
Submission and approval of budgets: The Governing Board approves the budget and
submits it to Minister;
Funding/ Budget: cost recovery (water charges), grants-in-aid, donations and DWS
subsidies / financial aid;
Spending autonomy: The Entity is autonomous within the limits of relevant legislation
and agreements;
Pricing: By the Entity, in line with the national Pricing Strategy on Raw Water;
Borrowing powers: the CMA will need specific approval from the Minister of Finance for
borrowing, but should only require overdraft facilities for working capital;
Surpluses/dividends: The Entity may not make a profit; and
Accounting basis: International Financial Reporting Standards (IFRS).
Financial Systems arrangements will have an important bearing on the financial
responsibility viability of the CMA. As the CMA evolves, so too will its financial
arrangements. At the outset, the CMA will receive assistance from DWS for billing and
collection of water use charges, but as the CMA develops and matures, these functions will
be taken over by the CMA.
In Year 1, it is anticipated that the Regional Office of DWS will bill and collect revenue on
behalf of the CMA. DWS will assume revenue collection risk in the transitional period. The
existing system and business process for billing and collection of water use charges, with a
consolidated invoice and centralised management of the system, is well established in DWS
and will continue for at least the first year of operation of the CMA. The regulatory
compliance matters of the CMA will be addressed in this period.
62
In year 2, the CMA will develop its offices and premises and substantial funding will be
required to start implementation of systems, specifically billing and revenue management
systems. As the CMA gathers momentum, this period will also see secondment of staff into
the CMA as the CMA gets processes in place. The early development stages of the CMA will
a strong focus on customer relations as the CMA tries to build it credibility with its
customers. Relationship building will also be extended to all stakeholders in the CMA. This
will entail building trust and credibility by understanding the issues in the CMA and
customers’ needs, including matters of licensing, billing, tariffs, etc.
In building relations with customers it will be vital for the CMA to have access to key
systems such as the WARMS database so that it can ably assist customers with queries,
having access to important information about the catchment and its users. This will help
develop the confidence of customers in the CMA.
During this stage, it is expected that the CMA will start taking on more responsibility away
from DWS as its development gains momentum. Integration of systems and processes will
be vital in this period as the CMA commences to undertake revenue billing and collection.
The centralised DWS billing system will be used for billing, debt management and financial
accounting, with WRM charges submitted to DWS by the CMA. Transfers from the trading
account would be made to the CMA account according to the arrangements agreed to in the
CMA business plan. These transfers would include funds generated through WRM charges
and establishment support from DWS. Operational support from DWS may also be required.
In year 3, consolidation of the business of the CMA will occur as the CMA would have
assumed its fiduciary and governance responsibilities. By this time, most DWS staff involved
in the CMA would have been transferred to the CMA. The WARMS information system will
be operational in the CMA, including HR systems and the all-important financial systems,
notably billing and collection systems. If revenue recovery rates are ahead of planned
recovery rates, the overall revenue and debt management function will be decentralised to
the CMA. Account payments would be directly to the CMA account and relevant entries
would be made by the CMA onto the billing system.
As the legally mandated CMA assumes more and more of its WRM functions, limited or no
payments would be due to DWS for WRM functions. The CMA would then be responsible for
disbursing payments for levies such as the WRC levy and/or Working for Water (WfW)
projects. Risk is however shared between the CMA and DWS, with the business plan as the
baseline for performance.
The Department’s process of Redress and Allocation Reform may also result in additional
operational support being required from DWS, especially where subsidies are in place for
the agricultural and forestry sectors. In addition, should users not be able to afford the
water user charges, operational support may be required from DWS to meet the shortfall.
63
In Year 5, Risk is shifted to the CMA in its entirety, with the CMA fully accountable for
fiduciary management and corporate governance. The CMA will assume its full authority
functions, it will be responsibility for all aspects of the operations of the CMA from tariff
setting and revenue management to HR and IT responsibilities. At this point, the CMA may
develop its own billing, debt and/or financial management systems, with oversight and
support from the DWS.
10.4 Financial Viability
10.4.1 Financial Analysis
The financial analysis has been based on a basic financial assessment of the projected
income and projected expenditure over a 5 year period from 2014 to 2019. In determining
the projected revenues, the financial model has taken account of the tariff structure, water
volumes, water losses, bad debts and DWS grants while the expenditure projections have
accounted for institutional overheads, salary, capital repayments and operational costs.
10.4.2 Establishment Costs
In setting up the CMA, there are certain initial set-up costs that will be incurred, primarily
costs associated with establishment of a Governing Board and initial costs in promoting the
CMA with stakeholders. During the early establishment process of determining the CMA
structure and appointing a Board and Chief Executive, there will be considerable
stakeholder engagement, including the possible appointment of specialists to assist with
processes of structuring and change management. These costs are over and above the
normal operating expenditure which is funded by the WRM charges. It is therefore expected
normal operating expenditure of the CMA.
The DWS should fund CMA organisational establishment costs for a period until the CMA
can submit annual performance plans requesting funding approval. It is envisaged that the
following main cost elements will include, among others:
a. Appointment of members to the Governing Board, including Chairperson. The
responsibility of the Governing board will be to ensure that all systems and
reporting procedures are in place;
b. Appointment of a CEO;
c. Developing Management capacity to run the CMA;
d. Development of Business and Performance Plan as a basis for requesting funding
approval;
e. Installation of information systems, communication and telephony;
f. Purchase of IT infrastructure and relevant operational software for management of
CMA Establishment of Management Information Systems;
g. Developing human resource strategies and transfer of appropriate staff to the
CMA;
64
h. Training of staff;
i. Buildings and administration including alterations and improvements to premises.
Each CMA will need to set up a main and possibly one or two sub offices depending
on the size of the water management area under the CMA’s jurisdiction; and
j. Initiation of Change management processes.
In addition to the above mentioned key establishment costs, it is anticipated that there will
be certain extra ordinary costs which will be incurred at the formative stages of the CMA.
These are once-off costs which are required for the successful establishment of the
organisation and should not be funded by WRM operational charges.
The key interventions that would need initial funding would include the development of the
first catchment management strategy for the entire WMA (Upper, Middle and Lower Vaal
catchment areas). In addition, there will be an intensive effort in the formative stages to
create awareness among stakeholders of the CMA establishment, including capacity
building and stakeholder participation. These promotional activities will be vitally important
for an effective CMA.
In its early operational stages the CMA may not have staff with sufficient capabilities, it is
thus recommended that in the start-up phase of the CMA consideration be given to
outsourcing to individuals, private companies or public institutions to ensure that the work
of the CMA is effectively done;
A summary of establishment costs is provided hereunder:
Table 11 : CMA Establishment Cost Estimate
Description
Estimated Cost (R)
Anticipated Investment Year
1,500,000 6
2015
Premises Improvements
3,200,000
2015
Business Planning
2,000,000
2016
15,000,000
2016
Computer Hardware and Software
5,000,000
2016
ICT Systems
3,200,000
2016
800,000
2016
3,200,000
2016
800,000
2016
Stakeholder Engagement
1,600,000
2016
Capacity Building
3,200,000
2016
Appointment of the Governing Board
Outsourcing of specialist service providers
Management Development
Staff Training
Change Management
6
Note that this is additional to the disbursements for the operation of the Governing Board which is accounted
for in the operational costs.
65
Sub-total
39,500,000
2016
The above costs are over and above the normal operating costs of the CMA and provided by
DWS as an up-front establishment allowance. The establishment costs have been extracted
from the DWS Financial Viability of Catchment Management Agencies (June 2012)
document, which indicates that the Vaal CMA will receive an establishment grant of
approximately R40 Million and the above costs have been determined to provide the CMA
with optimal operational capabilities.
10.4.3 Current Operational Costs
The table below provides an indication of the level of expenditure that has been incurred in
each of the Water Management Areas over the past 2 years, as well as the budget for the
current financial year.
Table 12 : Previous Years Expenses Budget
Previous Years Expenses Budget (Rands)
WMA
Upper Vaal
Middle Vaal
Lower Vaal
Total
2012/13
2013/14
2014/15
62 966 000
62 253 000
66 219 526
13 328 000
14 017 000
13 846 789
13 810 000
14 340 000
17 740 200
90 104 000
90 610 000
97 806 515
A high level breakdown of budgeted expenses for each of the Vaal catchment areas for the
2014/15 financial year is provided in the table below.
Table 13 : 2014/2015 Proto CMA Expenses Budget
2014/15 Expenses Budget (Rands)
Expenses
Salaries
Goods & Services
Movable Assets
Total
Upper Vaal
34,183,450
31,024,516
1,011,560
66,219,526
Middle Vaal
5,646,460
8,200,329
13,846,789
Lower Vaal
8,279,922
8,493,867
407,500
17,181,288
Total
48,109,832
47,718,712
1,419,060
97,247,603
10.4.4 Proposed Operational Costs
A model has been created examining likely which provides a high level assessment of
expenditure over a 5 year period as functions are transferred from the proto-CMA’s to the
CMA. The costs have been based on the existing budgets for the Proto-CMA’s.
Table 14 : Proposed CMA Expenses Budget
66
Projected Total CMA Expenses Budget
Year
2015
2016
2017
2018
2019
Salaries
48,109,831
50,996,421
54,056,206
57,299,579
60,737,554
Goods & Services
47,718,711
50,581,834
53,616,744
56,833,749
60,243,774
1,419,060
1,504,203
1,594,455
1,690,123
1,791,530
97,247,603
103,082,460
109,267,407
115,823,452
122,772,859
4,700,000
34,800,000
1,590,000
1,685,400
1,786,524
1,893,715
4,700,000
36,390,000
1,685,400
1,786,524
1,893,715
101,947,603
139,472,460
110,952,807
117,609,976
124,666,574
Movable Assets
Sub Total
Establishment
Costs
Board
Remuneration
Sub Total
Total
10.4.5 Projected Revenue
Projected revenues for the CMA will be based on the volume of water use projected across
the Water Management Areas within the Vaal and the applicable tariffs. A recent shift in
policy associated with the calculation of tariffs (i.e. the use of data from the WARMs
Database over the calculated yield), provides us with a number of potential datasets from
which to determine the calculated chargeable volumes.
In determining the actual sales from yield volumes, the following need to be considered:
•
•
•
•
•
•
•
The proposed water usage is a projection. A conservative model has been taken in terms
of revenue, partly to be prudent, but also because demand management is a key part of
the water resources strategy for the Vaal. In essence high demand would reflect poorly
on the performance of the CMA;
With Eskom and Sasol being dominant water users, and based on the requirement for
additional power, water demand will grow significantly in the catchment areas;
Possible demand from Botswana will impact on the water balance;
The Vaal River Catchment is dependant not only on their own runoff to provide for its
requirements but also on imported water from other areas such as the Lesotho
Highlands project;
Strategic reliance of the Vaal Gamagara Scheme in the Northern Cape on water from the
Vaal catchment areas must be considered;
Recharge of Rivers could potentially be negatively impacted by the re-use of wastewater
schemes; and
These interdependencies must be addressed by both the CMA as well as DWS on a
national level.
Taking the lowest demand projections for the catchment, the Water Requirements by each
of the primary water users in the CMA was selected as a sensible conservative model for
demand. However a significant discrepancy between the data produced for the
reconciliation strategy in 2009 and the observed “registered” users in the WARMS database
67
was identified. As a result a “rebasing” exercise was undertaken to provide a more accurate
projection of water use and revenue generation.
10.4.6 Re-basing of water usage forecast
In order to provide the most accurate input into the CMA model, the forecast for water
usage in the catchment area was derived from two key sources available: 2009
Reconciliation Strategy and registered use data from WARMS (September 2014).
The Reconciliation Strategy provides a reasonably granular level of detail of the various
users of water in the catchment, as well as an annual forecast up to 2019. It also includes
the wetland and river losses encountered in the catchment giving a holistic account of total
usage. The base year from the registered use is a more accurate count of water usage in the
current period however, but does not include a forecast for usage.
The high level growth forecast of the Reconciliation Strategy was maintained and adapted
for the various usage components observed in the registered use data. This process
effectively re-based the forecast to reflect the most recent account of water usage in the
catchment. This combined forecast was then used as to calculate revenue.
Table 15 : Re-based Water Requirements Demand Projections
2015
2016
2017
2018
2019
29 023 599
29 146 514
29 269 949
29 393 908
29 518 391
Irrigation
13 458 866
13 515 864
13 573 104
13 630 586
13 688 311
Forestry
Total
101
101
101
102
102
42 482 565
42 662 479
42 843 154
43 024 595
43 206 804
Using the above water requirement per water user, and the applicable tariff, revenues for
the new CMA can be projected as follows, a 6% escalation in tariff per annum for future
projections over the next 5 years:
Losses have been excluded from the revenue calculation.
Table 16 : Projected Revenue Budget
Projected Revenue Budget (Rands) – based on 100% collections
2015
2016
2017
2018
2019
72,268,762
76,929,309
81,890,411
87,171,450
92,793,058
Irrigation
19,515,355
20,773,883
22,113,572
23,539,656
25,057,707
Forestry
Total
128
136
145
154
164
91,784,245
97,703,328
104,004,127
110,711,259
117,850,929
The above revenues are the maximum possible revenues based on 100% efficiency in billing
and collections. However, it is estimated that the current efficiency of revenue collection is
68
80%. With improved billing and collection systems, it is estimated that the collections
efficiency will improve annually and possibly approach a maximum of 90% collection
efficiency by 2019. The table below provides adjusted revenues based on projected
collections efficiency.
Table 17 : Projected Revenue based on projected collections efficiency
Projected Revenue Budget (Rands) – based on projected collections efficiency
2015
Collection Efficiency
Total Collection
2016
2017
2018
2019
82%
84%
86%
88%
90%
75,263,081
82,070,795
89,443,549
97,425,908
106,065,836
10.4.7 Budget Surplus/Deficit
A summary of operational expenditure and projected revenues is provided in the table
below:
Table 18 : Projected Budget Surplus/Deficit
Projected Budget Surplus/Deficit (Rands)
Year
Revenue
2015
82,070,795
Establishment
34,800,000
Grant
Potential
Operational
8,306,175
Subsidy
Expenditure
(expressed as
139,472,460
positive)
Surplus/
(Deficit)
-14,148,508
% Surplus /
(Deficit)
-13.9%
2016
89,443,549
2017
97,425,908
2018
106,065,836
2019
75,263,081
4,700,000
8,804,546
9,332,818
9,892,787
7,836,014
110,952,807
117,609,976
124,666,574
101,947,603
-14,295,489
-12,704,712
-10,851,249
-8,707,951
-10.2%
-11.5%
-9.2%
-7.0%
It is clear from the above analysis that the overall costs of operating a CMA and a Proto CMA
in parallel will be return a consistent shortfall with the revenue generated by the tariff
system. This shortfall includes anticipated operating subsidies, although further works is
needed to define what constitutes a “public interest” subsidy.
The above analysis has been based on an existing collections efficiency of 80% which is
expected to gradually improve as the CMA implements improves billing and collection
systems and improved management processes. It is expected that these improvements will
result in a collections efficiency improving and stabilising at 90% by Year 5.
It is noted that these budgets are based only on revenue collected by the CMA through user
charges under the existing pricing strategy. No allowance has been made for:
69
•
•
•
•
Other operational grants provided by DWS;
Increases in tariffs (beyond inflation);
Tariff capping operating subsidy; and
It is anticipated that the budget deficits will be supplemented by the above operating
subsidies and possible tariff adjustments.
70
11.Institutional and governance arrangements
11.1 Corporate Governance Principles
Corporate governance refers to a system by which corporations are directed and controlled,
the governance structure specifies the distribution of rights and responsibilities between
the Board of Directors, Managers, Shareholders, Creditors, Auditors etc, and further
specifies the rules and procedures for making decisions. Good corporate governance has
been become more important since the collapse of various large corporations during 20012002. Although corporate governance is regarded as a private sector issue is has become
increasingly important in public entities.
In the South Africa context the King Report on Good Corporate Governance, three reports
have been issued, King 1(1994), King 2 (2002) and King 3 (2009) that deals specifically with
issues pertaining to South African companies. The various reports produced by Judge
Mervyn E King focussed on various aspects of good governance, with the King II report
listing seven characteristics of good corporate governance, these being: discipline,
transparency, independence, accountability, responsibility, fairness and social responsibility.
These characteristics are based on worldwide principles being adopted in most companies.
Although the various King reports and good governance issue are mostly related to private
companies, the principles must also be included in public institutions, and issues such as:
•
•
Sustainability is not only a primary issue that needs to be dealt with by the CMA but the
economic impact that the actions of the CMA will have on the constituents within its
borders are crucial; and
In terms of Chapter 7 of the National Water Act, Act 36 of 1998, the social
transformation and redress of inequalities of water distribution must be addressed, this
must however be integrated within the broader transition towards sustainability to
ensure and protect the resources for future use.
11.2 CMA Governing Board
The CMA Board will be established in terms of Part 2 of Chapter 7 of the National Water Act,
the composition of the Board in terms of Part 2 will be such that the interest of the various
stakeholders that form part of the CMA are represented and that the necessary expertise
are available so that the CMA can operate effectively.
The roles and responsibilities not only of the board but also of board members and the CEO
are stipulated in terms of Schedule 4 of the National Water Act. In terms of this schedule the
main functions of the board will be to:
•
The effective management of the affairs of the CMA;
71
•
•
•
•
•
To exercise the powers and functions that have been assigned and delegated to the
CMA so that the resources that are available to the CMA are utilised in an effective,
efficient, economic, proper and sustainable manner;
To develop and implement a strategy for the usage of the resources of the CMA,
taking into account stakeholder participation;
To implement the strategy for the usage of the resources that are available in such a
manner that the operations of the CMA is economical and can be done with the
income received;
Ensure that financial controls and oversight in in place so that the expenses can be
reported as is required from a public entity; and
Review and adapt the strategy and objectives of the CMA so that it best serves the
needs of the constituents.
11.3 CMA Board
The membership of the board must be such that it reflects and represents the various
stakeholders of the CMA in a balanced manner, but taking into account that sufficient
technical, financial and administration knowledge is available so that the CMA can operate
effectively. The appointment of members to the CMA board is however regulated in terms
of Section 81 of the National Water Act.
Prior to the appointment of the governing board of the CMA the Minister has to in terms of
section 81(3) establish an advisory committee that will recommend to the Minister which
organs of state, other bodies representing different sectors and other interested parties
should be reflected on the governing board. The appointed committee must ensure that the
necessary skills that will be required by the board, technical, financial and administrative will
be available to ensure the effective operations of the board.
Further the committee must also recommend the number of persons of each of the parties
to be represented on the governing board; the committee will also consult and agree with
the various parties prior to the Minister making the final decision on the matter. The
decision of the Minister will be communicated to the organs of state as well as the various
other parties so that these can nominate representatives to serve on the board. The
nominated persons will be appointed by the Minister unless the person does not comply
with the requirements as set out in section 81(7) a and b.
11.4 Governance Committee Structures
In terms of the principles of good governance committees will be established to not only
oversee the work of the board but to assist the board with technical, financial and human
resources matters. These committees will not have the powers to make decisions but rather
recommend to the board for decision making, unless certain functions are delegated to such
committees by the board. The following committees are proposed for the CMA:
72
11.4.1 Finance and Audit Committee
The provision of expertise on these matters can be either by a board member that leads this
committee or if such expertise is not available by an outside person supporting a board
member in these matters. The role of the committee is to ensure that proper financial
controls are available so that the CMA can function within the parameters as set out in the
Public Finance Management Act, Act 1 of 1999. The committee can also assist the board in
identifying issue pertaining to financial challenges, and assist with the development of
strategies to deal with such challenges to ensure that the CMA can remain financial viable.
Further to this the committee will also have to ensure that the CMA complies with the
requirements of the Auditor General and that the GAMAP principles are adhered to. This
will include the ensuring that financial records are kept, available and finance procedures
adhered to.
Although there is normally two separate committees dealing with Finance and Audit these
functions may be combined as one during the initial phase of the CMA start up, with two
committees being formed as the functions of the CMA increase.
11.4.2 HR and Remuneration Committee
One of the main assets of the CMA, apart from the water resources, are the human
resources of the CMA, to ensure that the board adheres to and addresses all the
requirements in terms of the Basic Conditions of Employment the committee that assist the
board on these matters will have to be led by a professional in the Human Resources field.
Thus committee will have to address issues such as employment conditions, salaries (taking
into account the Public Services scales), job grading etc.
11.4.3 Technical Committee
One of the most important aspects, with the largest number of resources assigned to this
function, would be the technical work that will be performed by the CMA. To assist the
board in the execution of this function a technical committee comprising of technical
professionals, if none is on the board, will be set up. As the Vaal River CMA will be made up
of three sub-catchment areas (Upper, Middle and Lower) it is envisaged that three subcommittees will be formed to assist the technical committee with the work that will be
required.
11.5 Appointment of CEO
The appointment of the CEO of the CMA will be in terms of Section 82(4) of the National
Water Act, be sourced or appointed from the nominated board members but cannot be the
elected Chairman or Deputy Chairman of the board. This position must be filled as a matter
of urgency so that the CMA can start to function.
11.6 Mechanisms for Regulation and Oversight
In all organisations both in the public and the private sector mechanisms for oversight must
be implemented, in the case of the CMA the oversight that will be in place will include:
73
•
•
•
•
Legislative requirements in terms of the National Water Act, Act 36 of 1998, this includes
interventions that may be done by the Minister in terms of section 87 if and when
required;
The CMA will be in terms of legislation be subject to the rules and regulations of the
Public Finance Management Act, Act 1 of 1999;
The CMA will also be subject to audit procedures by the Auditor General and all
regulations that is required by the Auditor General; and
The CMA will only be able to propose the tariffs for the water usage but it will have to be
approved by DWS and the Minister.
11.7 CMA Business Planning
The CMA with its establishment is required to develop a business plan, for not less than
three years, in terms of the National Water Act Schedule 4 and submit this to the Minister
for approval prior to it commencing with operations. In terms of the schedule, the business
plan will include:
•
•
•
•
CMA objectives;
Strategies that the CMA will follow to achieve the objectives;
Indicate the services that the CMA will provide (delegated and assigned functions), it will
also indicate to what level these will be provided; and
Financial and performance indicators will be set by the CMA. The financial indicators will
include:
o The strategy the CMA will be following for the setting of tariffs, the collection of
tariffs, borrowing of funds, procurement and disposal strategies; and
o Include a forecast of income and expenditure, and this must include capital.
11.8 Financial Control
In terms of the Public Finance Management Act the CMA will be regarded as a public entity
under schedule 3, and thus will have to submit a proposed budget through the Minister (as
the Executive Authority) to National Treasury. The Minister, through the DWS officials, will
review and ensure that the proposed budget is sufficient and falls within the ambit of the
functions and powers of the CMA.
11.9 Change management
Change management is an approach to transitioning individuals, teams and organisations
from their current state to a desired future state. Organisational change is a structured
change in an organisation for ensuring that changes are smoothly and successfully
implemented to achieve lasting benefits. In the case of the Vaal River CMA, a new entity will
be established but staff that is fulfilling the functions of the CMA currently may have to be
moved from one public entity to another. This movement of staff and their acceptance of
the move will determine the success of the CMA.
74
In the case of the Vaal River CMA a new entity will be created, albeit with some staff from
current public entities but this will create an opportunity to build a new identity for the
CMA. One of the major challenges that the CMA will face is the diverse experience and staff
that may be incorporated into the new CMA, staff fulfilling the same function but at
different parts of the CMA will form part of one structure into the future.
The new Vaal River CMA board will have to face the challenges that come with
amalgamation of and inclusion of staff from different entities and from other sources, the
board will have to ensure that:
•
A new entity that is created for both the staff and for the CMA, and that staff that come
from various backgrounds feel committed towards the new entity, and that now lines of
divisions exist between staff from the previous entities;
• The CMA will include sub-catchment areas (namely the upper, middle and lower), all
these should be seen as equal in terms of budget and commitment towards the success
of the CMA as a whole;
• Concerns that may face the staff members of the new entity must be addressed
timeously to ensure that resistance to the change that is occurring is addressed; and
• To ensure that the board can meet the above, the board will have to embark on a
proper change management process as created by the DWS. The process is highlighted
in the following steps:
o Ring fencing of current staff currently fulfilling the functions to be transferred to the
CMA; and
o Merging the Proto-CMA into the established CMA as per Section 197 of the LRA.
A draft transfer agreement has been compiled; its aim is to apportion the employment
liabilities and human resource arrangements of the DWS and CMA. This maintains that the
current remuneration and benefits of employees are continued through the transfer and all
administrative documents are passed over to the CMA. The addressing of grievances,
disputes and disciplinary action, pre-transfer and post-transfer are also dealt with.
11.10 Rebranding and stakeholder engagement strategy
One of the key aspects that are required for the establishment of the CMA is the
engagement and inclusion of stakeholders in the CMA establishment but also on the
development of the CMA and the operation thereof. Not only will this engagement assist
with the successful implementation of the CMA but will also assist in keeping all the
stakeholders informed of the changes that will take place.
75
12.Risk
Given an understanding of the nature of the initiative and the purpose of establishment of
the Vaal River CMA, it is useful to articulate some of the key implementation risks.
Managing these risks becomes a central function of the CMA and of DWS in its oversight and
regulatory role.
12.1 Complexity of the project
This water management area is complex and is already under water stress. Management of
the area will require balancing the needs of highly vocal and well-resourced sectors with
poor, marginalized and water deprived communities. Management will require a high level
of technical skills and understanding, as well as social and economic analysis capacity, and
the ability to drive transformation in the water sector in the catchment with a particular
focus on redress and meeting the needs of poor communities. The issue of capacity is dealt
with below.
12.2 Spheres of Government
Both Local and Provincial Government have a key role to play in ensuring effective water
management in the water management area. The boundaries of the water management
area do not coincide with the political boundaries of provincial and local government, and
the CMA will need to expend considerable effort to ensure effective relationships with
relevant local authorities and provincial departments, and to ensure a proper understanding
of the role, boundaries and purpose of the CMA. Buy-in, coordination and cooperation
between the three spheres of government are pre-requisites for achieving optimal water
management in the area.
12.3 Stakeholder acceptability
The CMA establishment puts forward a new “business model” based on a public entity for
water resources management in the Vaal area. In addition to government, it is key that this
new model is accepted by stakeholders, both current water users and would-be water users
across the area of jurisdiction.
12.4 Delegation of powers and functions
The service delivery relates to the rate at which water resources management functions are
delegated to the CMA. Once the boundaries of Vaal River CMA are changed and the
institution is transformed into the amalgamated Vaal River CMA, these delegations will
automatically apply across the entire new WMA. The risk is that the capacity may not be in
place to implement these delegations across the whole WMA, and so the transfer and
recruitment of staff and building of capacity must be done in a way that aligns with the need
to implement these delegations.
76
However, there is a further risk that the delegation of the final functions to the CMA may
take too long, particularly the delegation of the power to authorise water use and for billing
and revenue collection. An agreement should be put in place between DWS and the Vaal
River CMA regarding the timeframes and requirements for the final delegation of functions
to the Vaal River CMA.
12.5 Financial management
There are a number of dimensions associated with the financial viability risk. The most
critical include the inability to collect water use charges as a result of either poor legitimacy
of the CMA, inadequate systems and capability on the part of DWS prior to this function
being delegated, or the CMA after delegation. The willingness to pay by stakeholders is a
critical risk. The issue of affordability is also pertinent, in relation to user groups such as
resource poor farmers. Poor revenue collection will mean that the operating costs of the
CMA will need to be recovered from a small base of users and as such there is the potential
for higher charges that could worsen the cycle of affordability and debt collection.
12.6 Climate change and natural disasters
Climate change and disasters such as droughts and floods are significant risks that could
impact on the water availability and safety within the WMA. In particular the effect of
climate change could lead to changing water use patterns, reduced availability and
allocation of the resource, and lower ability-to-pay amongst users as enterprises become
marginal. Mitigation of this risk through augmentation is limited and accordingly this risk
should be quantified and considered carefully in the strategic planning of the Agency.
Typically, as a result of actual observations both locally and across the globe, a greater
increase in variability of weather patterns can be expected over the next decades, with
average ambient temperatures expected to rise by as much as 3 to 4 degrees Celsius over
the next 30 to 40 years. Results released on 24 July 2014 indicate that the world has
experienced its warmest ever June temperature in recorded history and that, for the past 25
years, every May has been warmer than the previous global average. As a result, adaptation
strategies will need to take into account the following effects associated with climate
change:
•
•
•
•
•
•
•
•
•
Flash Floods;
Regional Floods;
Hydrological Droughts;
Heat Waves;
Increased Evaporation;
Changes in Agricultural Demands;
Impacts on Surface Water Supply;
Impacts on Groundwater Supply;
Water Quality Deterioration – Sediments; Chemical; Biological;
77
•
•
•
•
Increase in average Water Temperature;
Design Precipitation;
Design Hydrology (peaks, hydrographs); and
Environmental Degradation.
12.7 Human Resources
The human resources risk is fairly critical and has a major impact on the CMA’s ability to
undertake its functions effectively. It is important that the CMA attract appropriately skilled
staff and retain them for sustainability of the institution. A key concern is that the market
for appropriately skilled WRM staff will become more competitive as other CMAs are
established.
A further risk is that the proposed transfer of staff using a Section 197 agreement under the
Labour Relations Act, which facilitates a direct transfer of staff from one organisation to
another may restrict the ability of the board in shaping a CMA which is truly independent of
the Department of Water and Sanitation as they will essentially inherit an existing
operational structure defined by the Department.
The need to protect the rights of the existing employees is recognised and a resolution to
the transfer will need to be negotiated with staff and their union representatives.
This risk can be mitigated to an extent through restructuring and where appropriate
retraining staff to fit the roles defined in their operational structure.
12.8 Organisational Technologies
The technology risks relate to the integrity of the data to be handed over by DWS. Data of
poor integrity may impact on the CMA’s ability to undertake its WRM functions effectively,
on its financial viability and on the credibility of the CMA. Other concerns around
organisational technology relate to the adoption of DWS systems, by the CMA, and the
suitability or appropriateness of this technology to the CMA, given its smaller scale.
12.9 Loss of staff through relocation
The location of the offices is yet to be determined. The proposed model accounts for all
staff in the prospective sub-catchments (Upper, Middle and Lower Vaal) to remain within
those catchments. However the model is only indicative and the organisational structure
adopted by the CMA Board may require that staff are either transferred or relocated to new
office space or geographical locations. A provision has been made for facilitating these
transfers within the proposed budget. However there is a risk that staff may choose not to
transfer and seek employment elsewhere which will mean recruitment of new staff along
with associated costs.
This risk can be mitigated, but not eliminated, through appropriate consultations with staff
during the development process.
78
12.10 Inefficiency in the handover period
During the handover period there is likely to be an additional effort required in operating
two parallel organisations namely the CMA and the Proto-CMA. In addition to a duplication
of costs, there is an additional risk of the two organisations working in a noncomplementary way on operational and policy matters.
12.11 Risk management
It is critical that the Vaal River CMA builds its relationship with relevant institutions and
stakeholder bodies in the WMA. Strong stakeholder relationships, participatory planning
and management, and strong governance will go a long way to reducing a number of the
risks raised above.
The complex nature of the work of the CMA, including managing complex financial
arrangements, requires good strategic, organisational and financial management. Such
management will be achieved through appropriate staffing of the CMA, and may require
moving beyond the human resource and remuneration policies and approaches of
government.
Ultimately, the management of risk will be dependent on strong governance arrangements
for the CMA. The role of DWS in regulating and overseeing the performance of the CMA will
also be important in this regard. DWS has considerable experience in the oversight of 15
Water Boards, the WRC and the TCTA, and will draw on this experience to ensure effective
oversight and regulation of the CMA.
79
13.Stakeholder Engagement Process
13.1 Purpose
The ultimate aim of the Stakeholder engagement is the effective creation and operation of
the Vaal River Catchment Management Agency
The Department will engage with stakeholders to determine the requirements crucial to the
economic and social needs of the area, this will be an ongoing process as the needs will
evolve as the country continues to develop and this will in turn feed the capabilities of the
water management area. The engagement process is vital as it effectively and credibly
develops the relationship between government and the end user; it captures the holistic
needs of the various catchment areas, improves service delivery, allows for transparency
and information disclosure and complies with international standards and best practice,
further driving the South African government as a leader on the continent.
The early implementation of the stakeholder engagement ensures that a strong partnership
is formed and issues that arise are managed with the utmost consideration of the
stakeholder.
13.2 Objectives
The stakeholder engagement has the following outcomes:
•
•
•
•
•
To make stakeholders aware of the new catchment management areas
To mobilize stakeholders to participate in consultation engagements
To improve communications and stakeholder relations
To strengthen democratization of the management of the Vaal River Catchment
management areas.
To comply with the mandate of the National Water Resources Strategy 2
These outcomes align with those developed for the Department’s Communication Plan for the
establishment of the Vaal Catchment Management Agency.
13.3 Principles
The stakeholder engagement will be based on the accountability principles of inclusively,
materiality and responsiveness. All identified stakeholders with material interests in the
process will be included in the engagement, their material interests will be identified and
addressed and the Department will respond to their interests. The stakeholder engagement
will operate in a way that makes effective use of the Department and stakeholders’
resources, including time.
13.4 Identified Stakeholders
Stakeholders identified by the department include the following:
80
•
•
•
•
•
•
•
•
•
Communities falling within the jurisdiction of the Vaal River Catchment management
area.
National Departments
Provincial Departments
Mining and Industry
Conservation and Environmental groups
Knowledge Sector/Academic Institutions
Agricultural representatives
Water Boards
Municipalities
13.5 Mechanisms of Engagement
The following mechanisms have been identified as engagement mechanisms for the
implementation of the Stakeholder Engagement Process:
13.5.1 Regional Steering Committee Meetings
The Regional Steering Committee for the Vaal is representative of the majority of the
“technical” stakeholders within the catchment. The business case was presented at the
following Steering Committee meetings and broad discussion was held with stakeholders in
these meetings:
•
•
•
•
Regional Steering Committee Meeting – 25 February 2014 – Bloemfontein
Regional Steering Committee Meeting – 12 May 2014 - Kimberley
Regional Steering Committee Meeting – 10 October 2014 – Bloemfontein
Regional Steering Committee Meeting – 7 November 2014 - Bloemfontein
13.5.2 Bi-lateral meetings with key stakeholders
A number of organisations identified as key stakeholders have been identified as warranting
direct, bilateral engagement to discuss the establishment of the Catchment Management
Agency. These will include:
•
•
•
•
•
•
•
Chamber of Mines
Agri SA, TAU, NAFU
SALGA
BUSA
Black Business Council
Political engagements
Water boards
13.5.3 Existing Community Forums
Reaching the communities within the Vaal Catchment is by far the most challenging activity,
both logistically (the Vaal is a large catchment with many disparate communities,
81
particularly within the lower reaches) and also technically as many citizens access water
indirectly through their municipalities and may not make the distinction between municipal
supply issues and the upstream resource management activities associated with the Vaal
River CMA. The approach that has been taken to ensure communities are appropriately
engaged is to present the business case at existing Community Forums and collect and
classify feedback given at these meetings. Aggregated issues will either be addressed here
or referred to the appropriate agency if the issues is not directly relevant to the
establishment of the CMA.
13.5.4 Statutory Gazetting of the Business Case
This document forms the current basis for the consultation process and is designed to cover
not just the financial justifications for the establishment but also the DWS’s current
understanding of the approach, outcomes and challenges to be faced in the establishment
of the agency. The Gazetting of this document in accordance with Chapter 7 of the National
Water Act, Act 36 of 1998, is a critical part of the communications process.
The Minister must, in accordance with section 78(3) publish a notice the in the Government
Gazette for a period of no less than 60 days inviting comment on the establishment of the
CMA. Once the Minister has received all the comments, and has considered these for the
various implications, the Minister may establish the Vaal River CMA.
13.5.5 Internal Consultations
While the main objective of the establishment process is focused on improving
management of water resources within the Vaal Catchment for the benefit of users, it must
be recognised that a significant number of Staff will be impacted by the creation of the new
catchment management agencies and their rights and interests must also be considered. An
internal consultation process has been ongoing with the affected regional offices. This is
managed within the Department under existing Change Management processes and is
dealing primarily with the Human Resources consequences of the establishment. This is
considered to be a separate process to the external engagement of stakeholders, although
conclusions of the internal stakeholder engagement process (such as the approach to the
transfer of staff) have been factored into the current business case.
13.6 Recording and Analysis of results
An Issues and Responses Report will be compiled and updated throughout the project. This
report will list all the comments from stakeholders (to be received from comment sheets, at
meetings, via e-mails etc) and responses from the project team.
The principle is to engage and identify issues with stakeholders, agree to an approach on
how to address the issues that have been brought forward, define the ownership of the
issue to particular parties responsible, action a solution, get feedback from the stakeholders
affected by the issue and if unsatisfactory readdress the issue with relevant solutions until
resolution is achieved.
82
13.7
Feedback to stakeholders
Feedback to stakeholders will be done by means of:
•
•
•
•
Feedback will be passed directly to key stakeholders engaged with the Regional Steering
Committee for the Vaal.
Direct answers to any questions or requests for additional information through letters
and emails.
Issues and Response Register will be attached to the final business case and will be
published online.
The provision of information in the various BIDS, newsletters, websites and other
communications means that have been identified. In addition to this the project and
relevant information will be shared at various meetings and forums that are continually
held within the WMA.
83
Business Case for the Establishment of the Vaal River CMA
Draft Aug 2014
14.REFERENCES
National Water Resource Strategy, First Edition, September 2004
Hall, D. and Jennings, G. (2007).Orange River Integrated Water Resources Management
Plan: Demographic and Economic Activity in the four Orange Basin States. WRP Consulting
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(Pty) Ltd.
DWAF. Part 7: Catchment Management Agencies (CMAs).
http://www.dwaf.gov.za/Documents/Publications/NWAguide/part7.pdf
DWA. Stakeholder Communication Strategy to Support the CMAs Establishment Project.
http://www.dwaf.gov.za/IO/Docs/CMA/Documents/Stakeholder%20Communication%20an
d%20Management%20Strategy%20Plan.pdf
DWAF.Guidelines on Organisational structure of Catchment Management Agencies. 2nd
Edition.
August
2002.
http://www.dwaf.gov.za/IO/Docs/CMA/CMA%20Development/StructureGuidelineAugust20
02.pdf
DWAF. Guidelines on the Viability Study for the Establishment of a Catchment Management
Agency In support of the Proposal to the Minister. 1st Edition. February 2002.
http://www.dwaf.gov.za/IO/Docs/CMA/CMA%20Establishment%20Guide/ViabilityGuideline
Final.pdf
DWAF. Human Resource Handbook – A Management Support Guideline for CMA. August
2005.
http://www.dwa.gov.za/IO/Docs/CMA/CMA%20Development/CMAHRHandbookGuideline.
pdf
DWAF Institutional Re-Alignment Project – Emerging Institutional Models for Water Sector
in South Africa (2008)
DPSA Salary scales, with translation keys, for employees on salary levels 1 to 12 and covered
by Occupation Specific Dispensations (OSDs) (Effective 1st April 2014)
DWA Financial Viability of Catchment Management Agencies, Financial Analysis and Policy
Considerations (2012)
TCTA Integrated Annual Report 2013/2014 Celebrating Water for All (August 2014)
Stats SA Census 2011
www.statssa.gov.za/census2011
84
NWRS2, 2013 DWA
http://cer.org.za/wp-content/uploads/2013/07/NWRS2-Final-email-version.pdf
de Lange, Marna. Water policy and law review process in South Africa
with a focus on the agricultural sector. In Peter P. Mollinga and Alex Bolding (eds.)
The Politics of Irrigation Reform. New Delhi: Sage Publications. (2001)
85
APPENDIX 1 – BENCHMARKING EXERCISE
Introduction
Considerable work has been undertaken to determine staffing and budgets for a number of CMAs
both operational and planned. This data was collated and analysed to benchmark the budgets
proposed for the Vaal River CMA against other similar institutions.
Approach
Expenditure data or budget data was collected for 8 organisations including other CMAs, the Vaal
River CMA, and the current Vaal proto-CMA. The sources of this data are presented in table 19.
Table 19 : Data Sources Benchmarked Organisations
Organisation
Data Source
Inkomati CMA
IRR(2012) - Business Case for the Inkomati-Usuthu Catchment Management Agency
Breede –
Gouritz CMA
IRR(2012) - Business Case for the Inkomati-Usuthu Catchment Management Agency
Mvoti CMA
GRAHAM MULLER ASSOCIATES (2001) - Mvoti to Mzimkulu Catchment Management Agency
Berg CMA
NOSIPHO CONSULTING (Pty)Ltd (2007) - Proposal for the Establishment if the Berg Catchment Management
Agency- October 2007
Vaal
(Proposed
Model)
Provided by the DWA
(Vaal
Alternative
Model)
See Appendix 2
Limpopo CMA
DWA(Date Unknown) - Business Case for the Limpopo Catchment Management Agency
http://www.dwaf.gov.za/IO/Docs/CMA/CMA/Limpopo%20CMA%20Business%20Case%20v3%20%20030913.pdf
Olifants CMA
DWA (2013) - Business Case for the Olifants Catchment Management Agency
http://www.dwaf.gov.za/IO/Docs/CMA/CMA/Olifants%20CMA%20Business%20Case%20v4%20%20281013.pdf
Budgets or expenditure was then corrected to ensure that they were relevant to 2014 prices. This
was done by applying a 6% per year compounded escalation rate for historical data and similarly a
6% de-escalation rate where data was for a future base.
The data extracted from these datasets included:
• Annual expenditure;
• No. of staff within each of the CMAs; and
• Approximate population served by the CMA.
Metrics examined included:
•
•
The ratio of staff to Population as an indicator of the relative size of the organisation in terms of
employees;
Average salary ranges as a measure of the equity in pay across the various institutions;
86
•
Expenditure ratios to determine consistency between staff costs and operational costs7.
Analysis
Staff Numbers and Salaries
The proposed model identifies a staff to population ratio which is consistent with many of the other
proposed CMAs. The number is low against the two existing CMAs but this could be explained by a
high population density in the Upper Vaal.
The alternative model developed by the Project Service Provider identifies a higher level of staffing
although still lower than the two existing CMAs. It should be noted that the Breede is considered to
be an outlier.
Average salaries based on current Proto-CMA rates are lower than proposed salaries in other CMAs.
This is potentially in conflict with the principle of attracting staff to work for the CMA.
Benchmarking Staff and Salaries
800
100
90
700
80
70
500
60
50
400
40
300
Pop to Staff ratio
Average Salary (,000's R)
600
30
200
20
100
10
0
0
Inkomati
Breed
Mvoti
Berg
Average Salary Range
Vaal (Alternative Vaal (Proposed
Model)
Model)
Limpopo
Olifants
Staff to Population Ratio
Figure A1: Benchmarking Staff and Salaries
7
Note that outsourcing costs were not available for the Mvoti and Berg CMAs.
87
Expense Ratios
The proposed model identifies a higher proportion of work outsource. This is likely to be due to the
relatively low staffing costs against the value attached to the production of the Catchment
Management Strategy within the Vaal (estimated at R15m).
Overheads fit within a reasonable bracket between the Inkomati and the other budgeted CMAs,
although it is notable that the variation in strategy between the different agencies is significant.
120%
100%
80%
60%
Staff Costs
Overheads
40%
Outsourcing
20%
0%
Inkomati
Breed
Mvoti
Berg
Vaal
Vaal
(Alternative (Proposed
Model)
Model)
Limpopo
Olifants
Figure A2: Expense ratios
88
APPENDIX 2 – ALTERNATIVE STAFFING MODEL
Introduction
The project service provider supporting the development of the Vaal CMA business case has
developed an alternative model for staffing. This is based on a systematic (although
qualitative) assessment of staffing needs to perform each function.
An analysis has been undertaken of anticipated levels of input required for each function by
a range of staff.
An assessment of likely staffing inputs was undertaken for each function of the CMA. The
detailed basis for each function is not reported here, but a characterisation of the likely task
distribution is provided in Chapter 6 above.
The principle applied has been to calculate inputs in terms of days per annum for each of
the identified roles. These have then been summed to give a value for a “Full Time
Equivalent” staffing unit for each of identified roles. Finally these have been rounded up to
ensure that numbers represent full time individual staff members.
Table 20 : Anticipated Staff Complement and Staff Costing
Section
CEO’s Office
Water
Resources
Management
Team
Staff Category
No Staff
CEO
CEO
1
R 1,234,915
CFO
Chief Financial Officer
1
R 946,587
COO
Chief Operations Director
1
R 1,075,145
R 1,075,144.75
Company Secretary
1
R 1,032,128
R 1,032,127.75
PA/Secretary
3
R 140,486
R 421,457.25
Manager
Director
1
R 963,390
R 963,390.25
Authorisations
Project Manager
1
R 571,524
R 571,524.25
Engineer
3
R 711,658
R 2,134,973.25
Hydrologist/Hydrogeologist
2
R 704,729
R 1,409,458.00
Technicians
2
R 285,816
R 571,631.50
Scientists (Water Quality)
5
R 623,589
R 3,117,945.00
Technicians
2
R 285,816
R 571,631.50
Project Manager
1
R 571,524
R 571,524.25
Environmental Control Officer
4
R 412,338
R 1,649,353.00
Manager
Director
1
R 963,390
R 963,390.25
Water
Resources
Planning
Project Manager
1
R 571,524
R 571,524.25
2
R 704,729
R 1,409,458.00
Engineer
1
R 711,658
R 711,657.75
Technicians
2
R 285,816
R 571,631.50
Director
1
R 963,390
R 963,390.25
Water Quality
Compliance
Manager
Water
Resources
Planning
Integrated
Information
Systems
Manager
Salary p/a
Total
R 1,234,914.75
R 946,586.67
89
Section
Team
3
R 365,660
R 1,096,978.50
1
R 711,658
R 711,657.75
Technicians
1
R 285,816
R 285,815.75
GIS
GIS Manager
1
R 585,109
R 585,109.00
Technicians
1
R 285,816
R 285,815.75
1
R 704,729
R 704,729.00
Technicians
1
R 285,816
R 285,815.75
Manager
Director
1
R 963,390
R 963,390.25
Institutional
Support
Institutional Manager
1
R 365,660
R 365,659.50
Assistants
3
R 138,006
R 414,017.25
Catchment Liaison Manager
3
R 365,660
R 1,096,978.50
Assistants
3
R 138,006
R 414,017.25
Manager
Corporate Services Manager
1
R 431,827
R 431,826.50
Revenue
Management
Accountant
3
R 754,210
R 2,262,630.00
Clerks
6
R 117,290
R 703,740.00
Procurement Manager
1
R 571,524
R 571,524.25
Project Manager
1
R 571,524
R 571,524.25
Payroll Manager
1
R 365,660
R 365,659.50
Office Manager
1
R 495,135
R 495,134.82
Messengers/Cleaners
4
R 99,565
R 398,261.00
General
Administration
General
7
R 138,006
R 966,040.25
Marketing Manager
1
R 365,660
R 365,659.50
HR
HR Officer
3
R 365,660
R 1,096,978.50
Legal
Legal Manager
1
R 677,634
R 677,633.75
Marketing
Technical
Administrative
Middle Vaal
Technical
Administrative
Lower Vaal
Total
Engineer
Finance and
Procurement
Upper Vaal
Salary p/a
IT Support
Stakeholder
Coordination
Corporate
Services
No Staff
WARMS
Hydrological
Information
Institutional
and
Stakeholder
Coordination
Staff Category
Technical
Inspectors/Control Officers
30
R 412,338
R 12,370,147.50
2
R 412,338
R 824,676.50
1
R 365,660
R 365,659.50
Assistants
1
R 138,006
R 138,005.75
Clerks
3
R 117,290
R 351,870.00
10
R 412,338
R 4,123,382.50
1
R 704,729
R 704,729.00
2
R 412,338
R 824,676.50
1
R 365,660
R 365,659.50
Assistants
1
R 138,006
R 138,005.75
Office Manager
1
R 495,135
R 495,134.82
IT Support
1
R 365,660
R 365,659.50
PA/Secretary
1
R 140,486
R 140,485.75
Clerks
1
R 117,290
R 117,290.00
Messengers/Cleaners
1
R 99,565
R 99,565.25
10
R 412,338
R 4,123,382.50
1
R 704,729
R 704,729.00
2
R 412,338
R 824,676.50
2
R 365,660
R 731,319.00
Assistants
1
R 138,006
R 138,005.75
90
Section
Team
Staff Category
No Staff
Salary p/a
Total
Administrative
Office Manager
1
R 495,135
R 495,134.82
IT Support
1
R 365,660
R 365,659.50
PA/Secretary
1
R 140,486
R 140,485.75
Clerks
3
R 117,290
R 351,870.00
Messengers/Cleaners
3
R 99,565
R 298,695.75
TOTAL Staff
168
R 66,879,521.39
Summary of Staffing Requirements
Office of the CEO
Implementation of the strategy and business plan of the Vaal River CMA will be driven by an
executive management team directed by the Board and lead by the CEO. The team will
consist of the CEO, CFO, COO, Company Secretary and four Section Managers, viz. Water
Resources Management, Water Resource Planning, Integrated Information Systems and
Corporate Services and in addition, the Legal Manager will report directly to the CEO. The
Office of the CEO is the strategy hub – providing strategic guidance, and shaping the
direction that the CMA must take.
The Board will play a dual role. The first role is that of providing strategic policy support,
including managing and coordinating activities of the board, and keeping records to ensure
that the Board performs its functions effectively. The second role is providing legal support
to the executive management team of the CMA and managing the legal affairs of the
organisation. The Legal Manager performs legal services for the CMA. Whilst the Legal
Manager reports directly to the Board, he/she will operate at the same grade/ post level as
executive managers that report directly to the CEO.
The board will meet 4 to 6 times a year to discuss and finalise these various strategic
decisions.
Water Resources Management
A technical team with industrial water use, legal /enforcement and environmental acumen
will provide operational support to the executive manager. The executive must preferably
be a qualified engineer or water resource manager with significant experience, supported
by water management specialists / assistant managers that have a Bachelor’s degree/
diploma from an accredited technical college or university with major work in chemistry,
biology, environmental sciences, urban planning, public administration or related fields, and
two years of administrative experience related to integrated water management and
understanding of the regulatory environment is recommended.
The water resources management unit will have a total staff complement of 21 employees
distributed across three technical teams including:
91
•
•
•
Authorisations – managing applications for water use licences and coordinating the
technical assessment and processing of these licences. This team will have a small pool
of expertise in hydrology and engineering but will draw on the wider CMA pool of staff
for technical review. The team is led by a project manager preferably with experience in
programme management to ensure prompt turnaround;
Water Quality – Technical team of 7 with specific water quality backgrounds; and
Compliance – Providing technical leadership to the district offices in compliance with
licence requirements.
Water Resources Planning
The Executive Manager Water Resources Planning will lead the water resources planning
and programmes division of the CMA, managed by a qualified engineer with at least 10
years’ experience. Specialists in integrated water resources planning, coordination and
management are responsible for coordinating the planning and management of water
resources. It is envisaged that the Water Resources Planning sub-division will rely on
strategic relationships with other public and private institutions to implement its mandate.
A close working relationship with the DWS planning units will be essential.
This component of the Vaal River CMA has a total staff complement of 7 members, and is a
highly technical division of the CMA and since the functions and posts of this division reside
within the Proto-CMA, DWS needs to assist the CMA and the Regional Office manage the
transfer of functions and related staff. An engineer with significant experience relevant for
water resource planning and management will lead this division. The incumbent must
understand the role of water in socio-economic development and poverty alleviation,
including understanding the significance of IWRM in the WMA. The water resources
planning manager must have at least a Bachelor’s degree in water resource engineering,
hydrology or closely related field coupled with a minimum of five (5) years’ experience in
the planning, development, conservation, administration, and management of surface
water resource or a master’s degree in civil engineering, water resource engineering,
hydrology or closely related field may be substituted for two years of the experience
requirement. Comprehensive knowledge of water laws and regulations pertaining to surface
water resource development, administration and management is an important
characteristic of this job.
Integrated Information Management
This is a highly specialised division with technical specialists in GIS and WARMS, and a
hydrologist managing each sub-division of the unit forming a team that is led by a Manager:
Information Management or Chief Information Officer (CIO). The WARMS division consists
of 2 officers responsible for managing the WARMS database, while a qualified hydrologist
supervising a water technician will manage the hydrological information derived from each
of the district offices where it is captured. It is envisaged that the information management
92
division will rely on strategic relationships with DWS and private institutions to implement
its mandate.
In total the division will have a complement of 8 staff members that will be gradually
recruited to build organisational capacity and ensure operational efficiency. Minimum
requirements for the GIS specialist include BSc degree or formal education in GIS; or degree
in geography, natural resources, computer science or related field; including professional
experience as an advance GIS user may also be considered.
This division is the critical link between all divisions of the CMA and the stakeholders, vital
for developing trust, building legitimacy and publicising the institution as a champion for
water resource management in the WMA. Catchment Liaison Managers with extensive
knowledge of the water sector and the related institutional arrangements should take
charge of engagement in each of the three areas. The incumbents must have a deeper
understanding of the impact of institutions on water resource management in the WMA.
The team will focus on developing the strategy for engaging with stakeholders both
centrally and within the field, however partner Catchment Liaison Managers will also be
posted within the district offices to ensure that engagement takes place at a local level. It is
also important to recognise that this team’s role is to facilitate engagement, but that
leadership of specific engagement is best owned by the relevant technical or geographical
department.
Corporate Support and Finance
The Corporate Services component is a support function of the CMA. Its management and
staff complement is led by an executive manager who is a Chief Financial Officer. The
Corporate Services Manager will control the management of Revenue/ Accounts,
Procurement, and General Administration. The HR manager and IT manager will report
directly to the CFO. The revenue / accounts Manager is responsible for administering the
collection and management of water use charges, and is supported by 6 clerks, and a payroll
officer. The General Administration Manager supervises general support personnel such as
(drivers, cleaners, groundsmen, etc.), and the procurement unit if managed by the
Procurement Manager supported by a technical project manager to ensure attention to the
technical quality of procurement. In addition a Marketing Manager will attend to all
marketing of the CMA.
The management systems of the key components of this division such as the Revenue
Management, Procurement, Administration and HR are located at head office (Vaal Office).
However, to ensure administrative efficiency, auxiliary services are proposed for the two
district offices (Middle and Lower Vaal) which will include an Office Manager, IT Support,
Secretarial/receptionists and clerks to support with the administration of local duties.
93
The Chief Financial Officer has the responsibility to manage and administer the general
finances of the CMA. Organisational development, staffing and general human capital
management will be the responsibility of the human resources (HR) practitioner. These
management posts are graded at a similar grade level, with possible variations depending
on the number of positions directly reporting to each post.
District Offices
In addition to the administrative staff referred to above, some 50 water resource inspectors
will be critical for the effective monitoring of both the regulatory compliance and water use
management functions of the CMA across the 3 sub-catchments. A comprehensive
knowledge of water laws and regulations pertaining to surface water resource
development, administration and management is critical.
As referred to in section 8.2.5 a local catchment level stakeholder engagement specialist
and assistant will also be posted in the district office to encourage engagement at the subcatchment level.
It is anticipated that a senior inspector will be identified to provide technical leadership and
administrative matters will be managed via the “Office Manager”
Human resource considerations
The CMA has not yet been functional; hence, this means that most of the powers and
functions earmarked for assignment to the CMA remain in DWS Regional Offices (ProtoCMA). A gradual process of transferring powers and functions to the new Vaal CMA should
be initiated as soon as the WMA is promulgated and gazetted. Such a process will however,
directly impact on staff currently employed by the Proto-CMA performing water resource
related functions. This section discusses some of the key considerations that relate to staff
transfer, including remuneration, performance management, systems and policies
necessary for effective human capital management.
Grading and remuneration
The topic on remuneration of staff is a vexed one as it affects the organisation’s capacity to
attract and build its internal capacity, and staff motivation. As such, the Vaal River CMA will
be a technical institution, with a requirement to enable government meet its national
obligations while also building a reputable international presence through acceptable IWRM
practices. This means that it will depend largely on the availability of high level technical and
coordination skills to perform its functions effectively. Such technical skills are required for
both strategic and operational management. With these issues in mind, three remuneration
models are proposed; one for the Board which is based on recovery of expenses rather than
a specific salary, another for technical staff which is based on Occupation Specific
Dispensation rates (OSD), and non-technical staff of the CMA who’s salaries have been
aligned with Department of Public Service and Administration “Salaries and Benefits in the
94
Public Service”. The salary of the Chief Executive Officer will be benchmarked against the
DPSA’s “Chief Director” salary level.
Transfer of staff
Section 197 of the Labour Relations Act (LRA) allows for staff to be transferred as part of “a
going concern” to another organisation provided that the conditions of service are
“substantively the same”. As a result, it is proposed that consultation with affected staff
take place to ensure that the conditions of employment are at least as good as that which
they enjoyed as DWS employees. Where appropriate, staff could be seconded to the CMA
within parameters as envisaged in the Labour Relations Act 66 of 1995 (as amended) (LRA).
Seconded staff will then be transferred from the Regional Office to the CMA in line with the
requirements of Section 197 as mentioned above. Consultation with affected parties is
critical and it must be ensured, and where possible written agreements may be put in place,
and salaries and conditions of employment need not be less than those applicable currently.
It is not the objective of this report to determine the impact of the transition to a catchment
management agency for individual staff members and this study has not allocated
individuals within existing DWS structures to new roles within the proposed CMA. This
would deny the proposed CMA board the opportunity to develop an organisational
structure with the necessary independence from DWS to achieve the objective of
independence.
However negotiations are ongoing and an agreement for the transfer of staff from the
existing department to the proposed CMA is currently under discussion. At this stage, and
subject to the conclusion of those negotiations, a likely transfer mechanism appears to be a
section 197 transfer under the Labour Relations Act (see 9.4.2), the study has analysed the
model outputs against existing Human Resources within the Proto-CMAs with the objective
of validating that sufficient budget is available to achieve a transfer of staff without a
negative impact to the individuals concerned in terms of salaries and benefits.
Table 8 identifies current roles by location, type and pay scale. This demonstrates that the
budget presented includes sufficient resource to accommodate all staff likely to be
transferred via a Section 197 agreement.
95
Table 21 : Analysis of Current and Proposed Roles
Proto-CMA Staff
Staff
Avg
Salary
Lower Vaal
Administrative
Institutional
Technical
9
2
12
Middle Vaal
Administrative
Institutional
Technical
Proposed Roles
Gain/Loss
Avg
Salary
Variance
Staff
Avg
Salary
Staff
161131
190443
331812
10
2
13
226024
365660
509802
1
0
1
29%
0
0
7
319847
6
1
13
226024
365660
509802
6
1
6
100%
Upper Vaal
Administrative
Institutional
Management
46
1
1
231927
285526
1304289
46
5
8
332841
365660
1017792
0
4
7
30%
Technical
55
381149
64
506217
9
Category
48%
35%
100%
37%
22%
-28%*
25%
*Note the reduction in average management salaries is due to the introduction of 7 new lower tier
management roles
96

Vaal River CMA Business Case

Transcription

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